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9:52 AM, 20th March 2023, About A year ago 21
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The potential scrapping of section 21 worries a third of landlords and is a ‘driving force’ behind growing numbers selling up and leaving the private rented sector (PRS), a survey reveals.
The findings from Mortgages for Business highlights that the potential reform of section 21 as part of the Renters Reform Bill could have a devastating impact on the PRS.
Under the proposals, landlords will no longer be able to use section 21 of the 1988 Housing Act to evict renters after the end of a fixed term tenancy, with two months’ notice.
Instead, the specialist buy-to-let broker warns that the government’s plan will effectively create open-ended tenancies and landlords will have to give a reason for eviction — such as rent arrears or antisocial behaviour.
Gavin Richardson, the managing director of Mortgages for Business, said: “Fears surrounding the scrapping of section 21 are a driving force behind landlords not remortgaging and selling up instead.”
He says that with all tenancies being assured landlords will have to use one of the new section 8 grounds for possession.
These will include the landlord wanting to sell the property, move into it or if there has been a breach of the tenancy by the tenant.
However, Mr Richardson says landlords have less to fear from reform of section 21 than they realised.
He explains: “Section 21 notices have been abused for years. They have been used as a vehicle for ‘revenge evictions’, for instance, where renters who have complained about their property are evicted in retaliation.
“I don’t think the reforms will prove to be that bad.
“Tenants didn’t have to do anything wrong to justify a section 21 notice — they could have been paying the rent on time and taking good care of the property.
“Sensible landlords rarely turf out good tenants who pay their rent as they want them to stick around.”
He adds: “So this reform will disproportionately hit bad landlords abusing Section 21, rather than the reputable end of the market.”
Mr Richardson also says that tenancies can be ended if the tenant breaches the tenancy and the government’s plan or a new ombudsman to settle disputes between tenants and landlords without a court process should be welcomed.
He also says that landlords can still sell a property which the potential reforms had put at risk.
He said: “The loss of full tax relief on mortgage interest payments for individual landlords, the stamp duty surcharge on additional property purchases, and the need to ensure properties meet energy efficiency rules expected to apply from 2025 are all far more significant for landlords.”
Mr Richardson continued: “You’d never guess that from the government rhetoric though.
For instance, I don’t think for a moment that section 21 exacerbated homelessness as one Tory community secretary claimed.
“The politicians are irresponsibly trying to curry favour with tenants: the country will suffer as the private rented sector — with its efficient use of property stock — dries up.
“The government needs to stop trying to gain cheap brownie points by taking a pop at the private rented sector and needlessly spooking landlords.
“It is the reason the government has lost the confidence of responsible landlords.”
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Monty Bodkin
10:57 AM, 20th March 2023, About A year ago
“Section 21 notices have been abused for years. They have been used as a vehicle for ‘revenge evictions’
Even using the figures from anti-landlord organisations, it is a tiny percentage.
The damage to the PRS from scrapping section 21 will far outweigh any advantage in protecting from this supposed 'abuse'.
Rod
12:02 PM, 20th March 2023, About A year ago
Revenge evictions were legislated against in the Deregulation Act 2015, where restrictions were put on being able to serve a S21 notice.
A landlord cannot use a 'no fault' section 21 notice if:
https://www.nhas.org.uk/news/article/when-landlords-cannot-use-section-21-notices
- the landlord has not given the tenant valid gas safety and energy performance certificates
- the landlord has not given the tenant the current copy of the GOV.UK How to Rent booklet
- the property is required to be licensed by the Housing Act 2004 but is not licensed
- the landlord is in breach of the provisions relating to the protection of tenancy deposits
- the landlord has taken payments prohibited by the Tenant Fees Act 2019 and not repaid them
- the notice is given in retaliation for a complaint about the condition of the property
The unspoken elephant in the room is the lack of support from the police and others for tenants who are illegally evicted by verbal or written notice of a few days or weeks; usually accompanied by threats. I have helped some of these tenants of unscrupulous landlords push back and retain their homes, allowing them time to find a better home and landlord.
Some landlords serve a S21 when they could serve a S8 notice but often they rely on S21 for antisocial behaviour or, to back up a S8 claim, in cases of rent arrears. As has been said here before, the courts are increasingly taking the tenant's side where grounds are discretionary or questioning whether the required compliance has taken place.
iHowz agree that reliable tenants who have been tenants for several years are entitled to some additional protection, which is why we have been calling for Parliament to adopt our proposal to amend S21 to reflect their loyal custom while allowing landlords to recover their property.
https://ihowz.uk/the-unintended-consequences-of-losing-the-section-21-notice/
We know the Government has already started preparations for the Property Portal, but progress on the key measure of improving the courts is glacial at best.
It's all well and good for us to share our opinions with each other here, but unless more landlords join landlord associations and encourage them to advocate for us, our voices will continue to be drowned out by the well funded and more politically attractive voices of tenant groups.
The Government tell us there were 2.74 million unincorporated landlords in 2022-21, yet less than 5% are members of a landlord association.
https://www.gov.uk/government/statistics/property-rental-income-statistics-2022/property-rental-income-statistics-2022
Cost of membership is often given as a reason for not joining, while ignoring the benefits of an organisation representing their interests, never mind the costs of not being able to recover their properties because their lack of knowledge resulted in failure to carry out the required compliance.
https://ihowz.uk/join/
Mick Roberts
12:34 PM, 20th March 2023, About A year ago
We set dangerous precedents when someone can't have something back that is theirs.
So a UK citizen car hire Rental firm, plant rental, property Landlord can’t have his property back when he wants?
They hire the car out & the person says I'm not giving it u back & the Court says the hire firm can't have it back either, do you really think there will be any more car hire firms left? Or will the hire firm rent it out to anyone that has a License or be really picky who they hire cars out to?
And this is why Shelter & Generation rent, u will be getting many more evictions next few years. As Landlords are panicking, they can’t even have their house back when they want. They din’t sign up to this.
If u stop someone having their own property back, then the providers of that property will stop providing. I too disagree when it’s someone’s home for 20 years. But let’s not forget, the Landlord is human too. He gets older. When can he retire? If u made things easy, tenant could easily move to an affordable house up the road. But that Landlord is selling too & in’t taking risky tenants any more either.
If u made it easy, I could sell to another Landlord with tenant in. He/She won’t buy either cause of your actions.
Shelter & Generation Rent, u r making it so, that tenants have nowhere to live, having the opposite effect of what u & us Landlords want.
Dawn Fellingham
12:38 PM, 20th March 2023, About A year ago
What concerns me a lot and nobody seems to be talking about it is the fact that the Select Committee of MP’s has recently recommended to the Government that you cannot sell your property for a year from the beginning of a tenancy AND in order to ‘encourage’ landlords to sell with tenants and say you have to market a property for 6 months before evicting. Is it me that thinks that is a major problem!?!
Alexandra
12:38 PM, 20th March 2023, About A year ago
Reply to the comment left by Rod at 20/03/2023 - 12:02
TBH I see what the NRLA are doing or rather are not doing and it just makes me really angry. Mr Beadle advocates for the retention of fixed term tenancies for the student market because that is what he invests in if my information is correct. He is not acting for Landlords but himself. Although IHOWZ seem to be more proactive than other organisations I do not feel that belonging to a Landlord association would do one jot of good. The only thing that will have any effect is when the entire PRS goes down the toilet and the incompetent Government be that Conservative or Labour are facing a huge bill for temporary accommodation for the millions they make homeless and they cannot spin it to the public anymore, I genuinely believe it is not that the govt do not understand - it is that they have an agenda and they do not want to understand
Graham Bowcock
13:34 PM, 20th March 2023, About A year ago
After much soul searching, we are planning a phased exit of the PRS. We have nice houses and excellent tenants, with a decent portfolio built up over thirty years.
However, the recent interest rate rises have made some of the lettings unprofitable, at a time when we are still seeing strong values (especially compared with what we have paid for the houses).
The risk of ending s21 is in our minds - we have used them sparingly over our time but there has been a distinct advantage to having them as a fallback.
As we are getting older, we have decided that releasing funds is important to us, but the constant battering of the sector by the government and anti-landlord spokesmen has pushed us over the edge.
Dylan Morris
13:58 PM, 20th March 2023, About A year ago
If Section 21 disappears then you cannot ask a tenant to leave if you need to sell. You will need to apply to the Court with all the associated legal costs. You will need to beg a Judge to let you sell your property, giving a very good reason as this ground is going to be discretionary.
PH
14:13 PM, 20th March 2023, About A year ago
Reply to the comment left by Dylan Morris at 20/03/2023 - 13:58
Do you have a link to this information? I thought that even without S21 2 legitimate grounds for repossession are selling or moving back in (either yourself or family member).
Graham Bowcock
14:14 PM, 20th March 2023, About A year ago
Reply to the comment left by PH at 20/03/2023 - 14:13
At the moment you do not have to give any reason for service of s21.
As to what the future holds is currently speculation only, with different options widely reported.
PH
15:17 PM, 20th March 2023, About A year ago
Reply to the comment left by Graham Bowcock at 20/03/2023 - 14:14
Many thanks for your reply. Hopefully none of us have to go through courts to get our property back to sell up. Absolutely ludicrous.