Renters (Reform) Bill could increase homelessness, warns industry expert

Renters (Reform) Bill could increase homelessness, warns industry expert

0:02 AM, 6th November 2023, About 9 months ago 15

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A proposal to abolish section 21 ‘no-fault’ evictions to protect tenants from being unfairly evicted could have the opposite effect, according to a leading industry figure.

The Renters (Reform) Bill proposes to scrap Section 21 notices, which allow landlords to evict tenants without giving a reason.

However, Neil Cobbold, the managing director of PayProp UK, says this could result in more evictions and homelessness for tenants because they would lose their automatic right to council assistance and face a harder time finding new properties.

He points to recent data from the Department for Levelling Up, Housing and Communities, which show that more than 24,200 households served a valid Section 21 notice were due council help in 2022/23.

All evictions would take place under Section 8

However, if Section 21 is scrapped, all evictions would take place under Section 8 of the Housing Act 1988, which requires landlords to prove a ground for eviction, such as rent arrears, antisocial behaviour, or wanting to sell or move into the property.

And PayProp‘s own research reveals that the three most common reasons for a landlord or agent to issue a Section 21 notice will also be eviction grounds under the proposed reforms to Section 8 – which means abolishing Section 21 is unlikely to bring about a big reduction in tenant evictions.

The company says the most common reasons for section 21 are:

  • A landlord wanting to sell their property
  • Rent arrears
  • A landlord wanting to move themselves or a close family member into the property.

Tenants evicted for rent arrears under Section 8

Mr Cobbold also warns that tenants evicted for rent arrears under Section 8 will face a more difficult time finding properties than if they were evicted under Section 21, as they might have a money order judgment against them to repay the rent, which would be a matter of public record.

He says that more than four-fifths of landlords (84%) were unwilling to let to tenants with a history of rent arrears, according to the most recent English Private Landlord survey.

Mr Cobbold said: “Ensuring a stable private rented sector is key.

“Landlords need confidence that they can continue to invest in the sector and regain possession of their properties efficiently through the courts if needed.”

He added: “If landlords leave en masse, then no amount of rental reform will bring down homelessness.”


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Reluctant Landlord

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8:38 AM, 6th November 2023, About 9 months ago

dont tell us what we already know - lobby the government and the Labour MP's!

Easy rider

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10:36 AM, 6th November 2023, About 9 months ago

Please, stop referring to Section 21 as a ‘no fault’ eviction.

Firstly, Section 21 isn’t an eviction. It’s a notice seeking possession. The eventual court order (if the judge finds in the landlord's favour) and the deployment of bailiffs is the eviction.

Whilst a Section 21 Notice may be issued for ‘no fault’ of the tenant, there are a number of Section 8 grounds that are also no fault of the tenant. They plan to introduce more.

Fergus Wilson

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10:58 AM, 6th November 2023, About 9 months ago

To abolish Section 21 will simply mean that some people who would have purchased a BTL property will think twice and not do so.
HMG introduced the AST in 1989 because investors would not purchase properties to rent out because they could not gain possession.

Judith Wordsworth

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11:43 AM, 6th November 2023, About 9 months ago

This would have all been sorted out months and months ago if ALL landlords had followed my suggestion when the RRB first raised it's head.

The suggestion was for ALL PRS landlords to issue a s21 Notice for Possession, for the cost of printing off a form and a stamp, ALL serving on the same date with the same expiry date - giving 3 months notice.

The government and Local Authorities would have then have had the possibility of 4.7 million people to rehouse on the same day! No one need have gone on to apply for a court possession order, unless they wanted to.

An opportunity missed, I think, to get a sensible dialogue and solutions to the housing shortage. Instead many PRS landlords are selling up creating a greater shortage of PRS properties, increased rents as supply less than demand.

Should this government U turn, those that did sell might be persuaded to re-enter the market as properties may be less than they sold for. Labour, should they get it will likely continue along the path of landlord bashing.

It's no longer a business for the fainthearted. For too many though they are not approaching the PRS as a business, not knowing their legal obligations and responsibilities, nor having a working/realistic loan to value.

Seething Landlord

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11:52 AM, 6th November 2023, About 9 months ago

Both main political parties are gambling that landlords will not leave en masse and that enough will learn to live without S21 to avoid any major disruption. Time will tell.

Stella

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12:02 PM, 6th November 2023, About 9 months ago

Reply to the comment left by Fergus Wilson at 06/11/2023 - 10:58
It was also very easy to spot these properties that were rented prior to the 1988 rent act with little income or incintive to maintain them.
Assuming a buyer could be found the value was about 50% of market value
.
There was no appetite for purchasing property and it was very difficult for prospective tenants

Getting rid of section 21 will hurt the economy just like it did in Ireland when they passed laws that made it impossile for landlords and for tenants.

Fergus Wilson

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12:19 PM, 6th November 2023, About 9 months ago

The marketplace will prevail.

A shortage of houses means higher rents.

If HMG wishes to increase the number of rented properties then it must come up with an advantageous package to attract people to invest in BTL

Peter Merrick

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11:10 AM, 7th November 2023, About 9 months ago

Section 21 was introduced with the intended consequence of increasing the availability of rented property. Section 21 is being removed with the intended consequence of crippling the PRS, reducing it to long term individuals and institutional Investors who will not be changing use for the foreseeable future.
They know what they are doing.

Seething Landlord

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11:35 AM, 7th November 2023, About 9 months ago

Reply to the comment left by Peter Merrick at 07/11/2023 - 11:10
They would say that the purpose is not to cripple the PRS but to stabilise it for renters.

Michael Booth

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13:49 PM, 7th November 2023, About 9 months ago

There are plenty of actions using section 21 instead of section 8 by landlors it is better for a tenant to leave under a section 21 has the council have no legal duty to offer housing has a section 8 makes you deliberately making youself homeless.plus you get the landlords legal costs to pay, but the councils don't and wont tell you this , has a landlord of20+years l have only ever used section 21 and saved the tenant from homelessness has the council have a statutory duty to home people.

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