If the abolition of Section 21 goes ahead more landlords could leave the market, a new report warns
Scrapping Section 21 ‘no fault’ evictions could lead to the private renting section shrinking by as much as 20%, according to a new report.
The National Landlords Association (NLA) says that if Section 21 is abolished there could be 960,000 fewer homes available to renters if landlords pull out of the market.
The government launched a consultation to abolish Section 21 earlier this year with the aim of giving private renters greater security.
Under Section 21, private landlords can uproot tenants from their homes with as little as eight weeks’ notice after the fixed-term contract has come to an end.
Many tenants live with the worry of being evicted at short notice or continue to live in poor accommodation for fear they will be asked to leave if they complain about problems with their home.
Evidence shows that the end of tenancies through the Section 21 process is one of the biggest causes of family homelessness, according to the Ministry of Housing, Communities and Local Government (MHCLG).
If the plans go ahead landlords would no longer be able to evict tenants at short notice without good reason.
Critics have warned that getting rid of Section 21 could make things even more difficult for landlords and disincentivise investment, reducing the number of properties available for tenants.
The report says that those who remain in the market are likely to become more selective about the tenants they let to in order to reduce investment risks.
Chris Norris, director of policy and practice at the NLA, says: “The government has clearly failed to recognise the realities of the private rented sector by proposing the abolition of Section 21.
“Any government which thinks it appropriate to risk the loss of nearly 1 million rental homes at a time of housing crisis needs to reassess its priorities as a matter of urgency.
“Rather than playing to the gallery, the government should be looking to support and incentivise good landlords to remain active and provide homes to those who need them, rather than making it harder and causing these landlords to exit the market.”
The report suggests that reforming the eviction process so that it is faster and cheaper could nullify the removal of Section 21 for many landlords.
However, the private rented sector would still see a likely reduction of between 180,000 to 390,000 homes, between 130,000 to 300,000 fewer homes available to benefit claimants and rent increases for between 110,000-240,000 properties.
Section 21 is the legal process landlords can use to evict tenants. Landlords do not need to provide a reason once a fixed-term tenancy ends.
Landlords can use a Section 21 notice to evict tenants after a fixed-term tenancy ends and if there’s a written contract, or during a tenancy with no fixed end date - known as a periodic tenancy.
Tenants who made a formal complaint had a 46% chance of being issued with a section 21 eviction notice in the following six months, according to research from Citizens Advice.
It has also found that revenge evictions have affected 141,000 tenants since laws attempting to ban them were introduced in 2015.
Good thing the Tories are…
Good thing the Tories are building lots of homes - oh wait they're not because they want people in poverty and having social housing creates Labour voters!
Less is More
So if the private renting sector shrinks by as much as 20% guess there will be more homes to buy or rent in the public sector. Sounds good.