Landlord Crusader: Section 21 abolition – congratulations to Shelter et al

Landlord Crusader: Section 21 abolition – congratulations to Shelter et al

9:51 AM, 19th May 2023, About 10 months ago 28

Text Size

And so, it came to pass – section 21 notices to gain possession of a rented property will be no more and there was only the wailing of landlords that could be heard.

So, I guess, congratulations to Shelter and Generation Rent and all the others on a media campaign that focussed on the vilification of landlords over recent years.

The publishing of the Renters’ Reform Bill this week makes for surprising reading but seeing the abolishing of section 21 still hurts. This is just like the ending of section 24 when all landlords took a massive tax hit.

Sadly, landlords aren’t seen in a good light and the downside of what will happen next hasn’t been discussed.

But it will be.

Investing our money into an asset

Shelter and the complainers haven’t quite understood that as landlords, we are investing our money into an asset that provides a home.

We then spend our money to maintain it and most of us will be paying a mortgage.

We also pay tax and invest time and cash in meeting our legal obligations.

But there seems to be a disconnect of sorts because Shelter and Generation Rent don’t appear to appreciate a basic truth.

It is our money that we have invested. Not yours. Not the taxpayers. Ours.

And we can invest it how we like.

There’s not a law in the land that will prevent landlords from deciding that enough is enough and deciding to sell their property.

The future has been made clear with the Renters’ Reform Bill.

If you think the lack of properties and high rents is bad now, wait until the flow of landlords packing in becomes a flood.

As I say, congratulations to Shelter.

Proposed abolition of section 21 ‘no-fault’ evictions

While the proposed abolition of section 21 ‘no-fault’ evictions will be celebrated by tenants’ rights groups, it could prove to be the death knell for a sector already under huge strain. Here’s why:

  • First, the abolition of section 21 undermines the fundamental principle of private property rights – and takes us back to the days pre-Thatcher when landlords struggled to reclaim a property. That’s why the Housing Act 1988 revolutionised the private rented sector. Abolishing section 21 means that landlords no longer can reclaim their property without a clear reason. This change effectively transfers the control over their property from the landlord to the tenant.
  • Secondly, the abolition of section 21 is an overreach of the government into the private rental sector. The government’s role should be to regulate the rental market, not to take sides in the relationship between tenants and landlords.
  • Thirdly, the abolition of section 21 fails to recognise that there are cases where evicting a tenant without a specific reason is necessary. Sometimes tenants violate rental agreements, such as not paying rent or damaging property. In these cases, section 21 ‘no-fault’ evictions provide a simple solution for landlords to reclaim their property without jumping through hoops. The alternative, of having to prove legal cause for an eviction, can be a long and expensive legal process.
  • Finally, the abolition of section 21 is likely to have unintended consequences. One of these is the reduction in investment in the rental market. Landlords will be less inclined to invest in rental properties if they believe that their control over the property is being taken away from them. This drop in investment will reduce the supply of available rental properties, leading to increased rental prices.

In addition, the abolition of section 21 may lead landlords to be more selective in choosing tenants. If landlords can’t easily remove tenants who aren’t paying rent or causing damage, they are more likely to focus on finding more reliable tenants in the first place. This will present challenges for those with poor credit histories, have previous evictions or other issues that may turn landlords off.

So, good luck Mr Gove with the aim of preventing landlords not renting to someone on benefits.

The Renters Reform Bill

Let’s face it, the proposed abolition of section 21 evictions in the Renters’ Reform Bill may sound like a positive change for tenants’ rights, but it has far-reaching negative consequences for property owners and the rental sector.

Instead of abolishing section 21, the government should focus on creating a balanced regulatory framework for the rental market.

A market that is regulated so that tenants have protections and property owners’ rights are respected, but not so heavily regulated that investment in the market decreases and rental prices rise.

Did you hear that Shelter and Generation Rent? You’ve got what you wanted.

But perhaps you didn’t want the huge increase in tenants being made homeless or being priced out of the ever-decreasing private property sector.

As I have said before: Be careful what you wish for because – as the shops say when they have a great deal – when it’s gone, it’s gone!

Until next time,

The Landlord Crusader


Share This Article


Comments

K Anon

11:26 AM, 19th May 2023, About 10 months ago

Another angle I read recently, maybe getting rid of S21 is to close a loophole for govt.
The more you think about it the more we possibly should embrace it. (I am a LL and have experienced absolute scum in my properties)
Look at local govt housing strategies and the numbers of 'unintentional' homeless that *must* be rehoused by the tax payer. Housing waiting list numbers have give through the roof. Unsustainable and appallingly expensive.
BUT...if you are "intentionally" homeless council has no obligation to assist with housing. enter S8 reason based.
As it is now if you are unintentionally homeless (i.e via a S21) they must house poor little smoking foul mouthed (insert name!) and her/their 3 children, pet dog etc.
The system is being played. Tenants actually ask LL to evict them so they can get social housing. I recently read a BBC article saying exactly that.
But no S21 = not anymore !
Maybe tenants will up their game a bit and start paying rent on time, not prioritise holidays, fags, fast food, latest phone etc, be abusive, allow access to inspect and still making everyone else’s life a misery …… because there won’t be a safety net anymore. Free lunch/housing is over.
Will save money and depressurise the system and tax payer as well. Great bit of politics.

TheMaluka

11:39 AM, 19th May 2023, About 10 months ago

Reply to the comment left by K Anon at 19/05/2023 - 11:26
Good point but paying rent on time is in the domain of Fairy Tales.

Richie

11:39 AM, 19th May 2023, About 10 months ago

So, I want to increase rent, £50 on a £795 rent that's been the same for three years. If they say no we're not paying the extra, what grounds do I now have?

TheMaluka

11:39 AM, 19th May 2023, About 10 months ago

Shelter and Generation Rent have achieved their objective; now tenants must live with the consequences. The Government have severely restricted employment mobility; now it must live with the consequences. The Scottish Government has messed up student letting and jeopardised the existence of the Edinburgh Festival; it must live with the consequences. Students will find the supply of relatively cheap term time accommodation difficult; both students and universities must live with the consequences. All new tenants will be referenced up to the hair on the top of their heads and beyond; prospective tenants must live with the consequences. Prospective tenants without a home owning guarantor will not stand much of a chance in obtaining a property; they must live with the consequences. Existing tenants with anything less than a perfect record, both financial and behaviour will be evicted before s21 is lost; they will have to suffer the consequences.
The good news is that with the sale of all the rental properties there will be many more potential guarantors around.

Rerktyne

11:39 AM, 19th May 2023, About 10 months ago

It's yet another example of the stupid politician and bureaucrat: those with no experience of the problems. It's also an example of sheer connivance: some imbecile actually thinks that Landlords will flood the market with properties: prices go down and tenants buy them up! Really? They'd have to sink for most tenants to afford them. And if that happened what about all the current homeowners who will fall into "2008-negative equity" and thereby helping the economy to crash? This will include people who work at Shelter! I hope!
Talk about putting the loonies in charge of the loony bin!

TheBiggerPicture

11:40 AM, 19th May 2023, About 10 months ago

Well said.
Shelter/Gove don't understand there is no free lunch. It's landlords and tenants that pay for this shortsightedness.

JB

11:40 AM, 19th May 2023, About 10 months ago

Reply to the comment left by K Anon at 19/05/2023 - 11:26
I agree, abolishing section 21 will ease the stress on councils required to re-house.

Gary Lowden

12:02 PM, 19th May 2023, About 10 months ago

Am I the only one or am I just bitter that I believe the government who say they are "so concerned about the 11 million tenants currently renting are just doing there normal smoke screen in trying to secure themselves 11 million votes!. because they are going to need them!!

Nicholas Grange-Bennett

12:21 PM, 19th May 2023, About 10 months ago

Safetylet is the most consistant and longest established Rental Warranty provider in the Business but small by design.
So this gives me the oppertunity, to be able to provide you, with a reliable statistic. Since the begging of the year we have seen 2.4% of our landlords issue Section 21 notices. Of these 2.2% because they are selling. As we are 5 months into the year this would equate to a reduction of availible property of 5.2% this year. This assumes that the recent reform bill, has no further impact on landlords wanting to leave the market. Unlikely.
Shelter and Gereration rent have just scored the biggest and most momumental own goal in the history of the housing rental sector.

JB

13:31 PM, 19th May 2023, About 10 months ago

Reply to the comment left by Gary Lowden at 19/05/2023 - 12:02
Tenants need to realise that the problems in the rental market is due to the Government and the likes of Shelter and is NOT the fault of landlords

1 2 3

Leave Comments

In order to post comments you will need to Sign In or Sign Up for a FREE Membership

or

Don't have an account? Sign Up

Landlord Tax Planning Book Now