Letting agents say that the scrapping of Section 21 evictions, as part of the Renters (Reform) Bill, is a major concern to them.
A survey of almost 700 letting agents from across England led by rental market experts Goodlord has revealed that the abolition of Section 21 continues to be the leading cause for concern within the industry.
The study found that the majority of agents feel unprepared to implement the recently announced legislation, with large parts of the sector also concerned about the move to a system of assured tenancies and the Bill’s potential impact on student lets.
When asked which element of the Renters (Reform) Bill was causing them the most concern, half – 50% – of the 690 letting agents surveyed by Goodlord said the abolition of Section 21 was their primary worry.
The Bill will abolish Section 21, a clause that allows landlords to evict a tenant without providing a reason – commonly dubbed ‘no fault’ evictions. This is causing concern amongst landlords and agents for how they will be able to recover a property in instances such as non-payment of rent or anti-social behaviour.
Next on the list of concerns is the planned reform to Section 8, the new and strengthened regulations designed to allow landlords to evict a tenant after six months if they wish to sell the property, move in themselves or offer the property to a relative. Despite being designed to provide safeguards to landlords after section 21 is outlawed, 20% of agents said the Section 8 changes were their biggest worry, indicating that many are unsure whether the provisions will be robust enough.
These Section 8 fears are vying for second place as the most commonly cited concern amongst agents, with 20% of those surveyed also saying that the move to assured tenancies – a decision which took many in the industry by surprise – was their biggest concern.
Tenancies are often under 12 month contracts. The move to assured, or ‘periodic’, tenancies will mean that properties will be under rolling monthly contracts, once the Bill has been implemented. Scotland introduced rolling contracts in 2017.
When asked where extra support and guidance would be most helpful, 52% of agents said the move to Assured Tenancies, highlighting a lack of clarity as to what these changes will mean for them in practice.
There is also a large amount of confusion and uncertainty around how the Renters (Reform) Bill will affect student tenancies. It’s feared that the move to assured (or ‘periodic’) tenancies won’t be appropriate for student lets, which typically end in line with the academic year, when the properties are taken up by a new group of students.
Some 51% of agents said they did not yet understand what the reforms would mean for student lets, with only 17% of letting agents, including those specialising in student lets, stating that they understood what the impact would be.
Oliver Sherlock, director of Insurance at Goodlord, commented: “Whilst we have now seen the first version of this Bill, it doesn’t mean the industry has full clarity- far from it. These findings show that a lot of concerns and unanswered questions remain for agents and their landlords when it comes to the sweeping changes this legislation will enact.
“For some areas, such as the Bill’s possibly unintended impact on student tenancies, we hope that the Government factors this into the final text of the legislation. In the meantime, it’s clear the industry must start to get to grips with the details of the bill and make meaningful preparations now to ensure their businesses are well prepared for change.”
Section 21 evictions hit record high as BTL landlords ‘start to panic’
Agents really don’t need to panic- the reality is, this change will make very little difference to how we all operate on a day-to-day basis. Here’s why:
85-90% of tenancies are ended by the tenant
Around 4% are sold- a possession right that will be protected
About 2% move in or move family in- a possession right that will be protected
Annual rent increases will still be permitted
S8 Grounds will be strengthened for Landlord around rent arrears and ASB
Factoring all of those elements in- what, as an agent, is still worrying you about S21 going?
Look at Scotland- there was similar panic in the lead-up to removing S21 there- and everyone quickly realised there was nothing to worry about. It’s a headline-grabbing, red tape generating, administerial beast of a change- that will make little or no difference to tenants. In fact, I think the uniform thought, is that this will negatively impact lower-income tenants as agents and landlords alike will be more cautious before placing an indefinite tenancy.
I’ll be on a Zoopla-hosted webinar next week talking about the RRB and answering questions- ping me your questions and ill try and cover them then.
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
You’re deluded if you think that landlords aren’t very, very worried and that they shouldn’t be worried.
You’re deluded if you think that landlords are not being used as a political football for tenants votes and that, whether this Government or the next, they will not continue to increase regulation to landlords, reduce returns to landlords, impose controls on landlords, increase protection to tenants, etc. etc.
Everyone who has had any experience of the legal and court system in this country knows that it is a shambles and not fit for purpose. There is no way in the world that the Government can or will reform the legal system sufficiently to make a meaningful difference in assisting landlords being able to get possession of their properties. The burden of proof required as well as the costs and delays will be devastating to many landlords.
Oh, and not forgetting the dramatic increase in BTL mortgage rates and the upcoming recession when unemployment starts to climb as will tenant payment difficulties.
That’s aside of course, to the Government increasing capital gains tax rates and reducing CGT reliefs on those who wish to sell up to leave the sector.
This, all against an alternative of just sticking the money in the bank and earning an almost risk free 5% pa. interest.
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
Whilst I will agree there is a lot of fear out there, the reality is that the vast majority of proposed changes will make very little difference to how the PRS operates. The removal of S21 is often cited as an ‘easy way’ to remove a problem tenant (ASB, sporadic rents, etc)- however (as an agent awaiting a 3rd court hearing) I can confirm that the ‘no fault’ approach isn’t necessarily effective when you have a tenant intent on making the process as difficult and drawn out as possible.
As such, I would argue that strengthened Landlord rights around regular arrears (rather than the random 2-month requirement), ASB, right to sell and right to reoccupy could and should (if instigated correctly) actually create a better legislative landscape for landlords and letting agents facing the need to evict.
The biggest impacts to Landlords atm are S24 and mortgage rates- neither of which are related to the RRB or removal of S21. Mortgage rates will have to run their course, but lending will cheapen again. S24 can be negated by becoming a company- something that new landlords will do from the offset.
The musicians might change but the band will most certainly keep playing.
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
If 85-90% don’t need Section 21 notice …….. why ban it?
You are missing the point. PRS is a business and no business that wants to stay afloat hands over control to someone else or find they have none. It is a fundamental legal right of a property owner to get their property back at the end of a “Temporary Contract”.
Section 21 by your reconning is only necessary for 4% to 6%. So what’s the big deal? Landlords are not creating mass evictions!!!!
Section 21 is not used on good tenants, so good tenants have nothing to worry about!
Section 21 is used for ‘Rogue tenants’ and I can fill an encyclopaedia on the grief, misery and costs for both landlord and agents. The financial loss increase the longer it goes on to get them out. Section 21 is used on these tenants, the ones that typically put two fingers up.
Banning Section 21 is not necessary by governments own figures. This is a political decision from lobbyists who represent tenants and we know who charities. What is their motive? To keep the rogues in for as long as possible.
The simple fix is never changed the tenancy from a 6 month fixed contract. Always ends with no periodic continuation on the contract and requires renewing every six months.
My money is on Government coming under so much pressure because of the S”t mess they have created with lack of housing, once Sec 21 is banned, they will move onto minimum tenancy term of 3 years or more. That will end BTL immediately and the small landlord in PRS.
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
This is, quite literally, my point. It’s clickbait, headline-grabbing politics- all the media coverage but no substance. I, and many others, have banged our heads against walls trying to engage with GR, Shelter, ACORN etc to better explain the nuances of S21 and the limited changes it will make and, in fact, the negative impact it will have on the most vulnerable and lowest income households. Sadly, they too are not interested in engaging in meaningful debate but feel they’ve ‘got one over on landlords’ any way they can. When it all comes out in the wash they will ignore it or plead ignorance. No doubt focusing on their next headline-grabbing idea.
People are getting far too caught up with S21 going and should, instead, focus on WHY they need a property back….
Almost every reason is covered- probably the most notable currently missing is the right to take back a property to undertake substantial maintenance or improvements/extensions.
Otherwise…..
Rent increases- allowed; selling- allowed; moving in- allowed; ASB- eviction to be strengthened; Rent arrears- terms & ground to be strengthened.
What other reason for securing vacant possession of a property is there and why does this concern you?
I personally don’t agree with mandated contract terms of 6 months and can’t see the gov mandating 3 years either (neither of which are suggested in the RRB proposals nor has similarly been implemented in Scotland- the best place to see where our PRS is heading).
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register