Will Ditching Section 21 Evictions Cause Detrimental Impact On Tenants?
The government are moving forward in their bid to abolish no-fault, Section 21 evictions in privately rented accommodation.
Whilst Theresa May claims the banishment of section 21 evictions will help safeguard responsible tenants ensuring that they are offered “long-term certainty and the peace of mind they deserve”, many have claimed that it could prevent landlords from being able to easily evict problem tenants.
Following the announcement yesterday, there has been further speculation that the government’s desire to create a fairer private rental market for tenants will have adverse effects as many will likely leave the sector, narrowing the pool of available property further and potentially diminishing tenant choice.
Further reforms to the eviction process are currently being considered in England and Wales with criteria to section 8 evictions also likely to change.
Whilst many organisations working in the privately rented sector are pleased that tenants have more power through the various reforms that have taken place this year, many fear that the pendulum of power could swing too far in the opposite direction which will decrease investor confidence and drive landlords to leave the sector.
This has the potential to reduce the available housing stock within the rental sector, which could lead to reduced choice for tenants.
However, section 21 eviction notices have already been abolished in Scotland, highlighting the fact that the impact could be less severe than many have anticipated.
Prime Minister Theresa May said: “Everyone renting in the private sector has the right to feel secure in their home, settled in their community and able to plan for the future with confidence.
“But millions of responsible tenants could still be uprooted by their landlord with little notice, and often little justification.
“This is wrong – and today we’re acting by preventing these unfair evictions. Landlords will still be able to end tenancies where they have legitimate reasons to do so, but they will no longer be able to unexpectedly evict families with only 8 weeks’ notice.
“This important step will not only protect tenants from unethical behaviour, but also give them the long-term certainty and the peace of mind they deserve.”
Communities Secretary, Rt Hon James Brokenshire MP, said: “By abolishing these kinds of evictions, every single person living in the private rented sector will be empowered to make the right housing choice for themselves – not have it made for them. And this will be balanced by ensuring responsible landlords can get their property back where they have proper reason to do so.
“We are making the biggest change to the private rental sector in a generation. We are creating homes, opportunities and thriving communities, where people can come together and put down roots, bound by a strong sense of belonging.
“Everyone has a right to the opportunities they need to build a better life. For many, this means having the security and stability to make a place truly feel like home without the fear of being evicted at a moments’ notice. We are building a fairer housing market that truly works for everyone.”
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.”
Tom Gatzen, Co-founder of ideal flatmate, commented: “Today’s news will bring a greater degree of security and stability to thousands of tenants across the nation and will ensure that any termination of a rental agreement is done fairly and with enough forewarning to enable alternative arrangements to be made.
“As a nation, we rely so heavily upon the rental sector and as this need evolves so must the way we govern it. Ultimately, we want to achieve a harmonious space that not only remains profitable for UK landlords but enables tenants to secure a property quickly and cost-effectively.
“Of course, for those that don’t abide by the rules there must be consequences and while today’s news will help rebalance the landlord-tenant scales, it’s important that this doesn’t swing too far the other way.”
Calum Brannan, Founder and CEO of Howsy, commented: “Any evolution of the UK rental market that benefits both tenant and landlord is a positive one but while we look to make it a more secure space for tenants, we also need to make sure these changes aren’t to the detriment of the landlord.
“We’ve seen the impact caused by the Government through previous knee jerk policy implementations against the buy-to-let sector and the resulting reduction in rental stock actually entering the market as a result.
“While this latest move has been made with the best intentions, it’s vital that the landlords themselves are also safeguarded so that we don’t further exacerbate this exodus of rental property providers. By removing their existing route to quickly evict genuinely poor tenants, we could well be doing so.”
Joanne Young, Legal Director in Ashfords’ Property Litigation Team gives her reaction to the Government’s announcement to ban controversial ‘no-fault’ evictions: “I am concerned about the proposals announced today. In the same vein as the tenancy deposit rules, the licensing of HMOs, the retaliatory eviction law and, recently, the new legislation on tenant fees, the proposals to prevent section 21 being used by landlords to obtain possession is another step aimed at improving the PRS (private-rented sector) and tackling ‘rogue’ landlords.
“No one can argue that there are some very poor practices by some private landlords. But this ignores the excellent private landlords who are providing great quality housing for tenants. Those landlords, landlords I see on a day to day basis, do not use section 21 without good reason; it is used simply because it provides a means of obtaining possession that does not result in long court proceedings- proceedings that can have a significant financial impact on those landlords.
“Unless there are real improvements in the Court process, I fear these proposals may be the final straw for many private landlords. I share the concerns that, in the long term, this may simply drive many landlords out of the market. I also suspect that the ‘rogue’ element of landlords will continue as they do at present- with little regard to the law.”
David Cox, ARLA chief executive, said: “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.”
Will these changes to eviction law cause an adverse effect on the private rental market?