Scrapping Section 21 could have an even greater impact than Section 24

by Paul Shamplina

8:39 AM, 2nd May 2019
About 2 weeks ago

Scrapping Section 21 could have an even greater impact than Section 24

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Scrapping Section 21 could have an even greater impact than Section 24

For me, scrapping Section 21 could have an even greater impact than Section 24, particularly if the only alternative, the Section 8 process, is not fully reformed with updated grounds added.

We have had numerous landlords calling our Landlord Action advice line panicking about this. My prediction is that we will see a surge of small landlords, those with one and two properties, exiting the market or wanting to serve Section 21 notices prior to the new law coming in which. The result? More evictions and more homelessness – the very opposite of what the government was is trying to achieve!

It may well create opportunities for other landlords to make purchases, but I think that landlords on the whole will be much more diligent in the refencing process, meaning tenants who may previously have been granted a tenancy, could be refused. In addition, I worry for tenants in receipt of housing benefit, who will likely be the victims of such a change – and don’t even get me started on Universal Credit!

Rents are still strong, and people still need somewhere to sleep, but the landscape of buy-to-let has changed significantly in the last 10 years and landlords must adapt. Sadly, some are struggling to keep up with the vast number of changes and this could be the final straw to break the camel’s back!

In theory, having specific Housing Courts would be great, but what about in practice? The Ministry of Justice has the smallest budget and does not have any investment. Where would these Housing Courts be situated? How far would a landlord/tenant have to travel? Recruitment of Judges is also very challenging, and morale of Judges is at an all-time low according to feedback I received when attending the Housing Court Consultation in Leeds.

Then we come on to bailiffs. The number of bailiffs has been cut to the bone, they are overworked and under paid, expected to carry out landlord and tenant evictions as well as mortgage repossessions and carry out process serving family papers. It’s impossible for them to try and collect County Court Judgements. I do agree with David Smith that the bailiff system needs a total overhaul and they should consider making it private. There is currently a consultation about using High Court Sheriffs.

When we can obtain leave at court to transfer up to the High Court, it takes us approximately 2 weeks to carry out an eviction rather than 8 to 10 weeks. Section 21 forces landlords to be more compliant under the Deregulation Act and knowing that a Section 21 notice cannot be served in the future, forces the landlord to serve an EPC, Gas Safety Certificate, How to Rent Guide, along with protecting the tenant’s deposit, and where applicable a section HMO licence. How will this change in the future? It will be interesting to see how it plays out.

I urge Property 118 readers to complete the Government Consultation into the banning of Section 21’s when it comes out in May/June time – the Government needs to see the impact it will have from the voices of those it will impact. If it is going to go ahead, then we all need a say in how it is shaped going forward. As landlords, let’s remember all we want is a good tenant, who can pay the rent on time, look after the property and make sure we can have access to carry out inspections.

Contact Landlord Action

Specialists in tenant eviction and debt collection. Regulated by The Law Society.


Comments

Luke P

12:19 PM, 2nd May 2019
About 2 weeks ago

I'm sure for the right salary a number of the more experienced LLs from amongst our own forum users would be willing (and likely to do a better job) of ruling over cases in a specific Housing Court. Trouble is, we won't be seen as the 'right kind' and so continues the fun fair.

PJB

17:40 PM, 2nd May 2019
About 2 weeks ago

With a distinct lack of Ministry of Justice funding and the odd government source indicating that will be no Housing Court when the reforms are enacted, we are all up the creek without a paddle...
Well then, we have a privatised deposit dispute resolution service that seems to be working more or less OK and the fees are reasonable. It strikes me that many S.8 grounds are not dissimilar to many deposit protection disputes.
HOW ABOUT bolting the Housing Court on to the current deposit dispute resolution service funded by the same (slightly increased) fees. The powers between the two services are comparable and it would also be logical place to house email 'notary' servers to aid the housing court when validating historic email communications between landlord and tenant.
As with the deposit dispute service, the disputants would be free to use the court system with all its future and attendant problems.

AP

8:44 AM, 4th May 2019
About 2 weeks ago

Very well written article Paul.
My opinion is that if there was a properly funded overhaul of the section 8 procedure then perhaps the removal of section 21 wouldn’t be disastrous.
However, as you point out, the current system is chronically underfunded and the noises seem to be that section 8 will remain in the courts as they are.
That will be a disaster.
The tenants campaigning groups on the whole will be happy to see landlords struggle and suffer as they see it as ‘payback’, such is the level of vilification of landlords.
Unfortunately there is no foresight that once the PRS shrinks, there may be some benefit for a small proportion of renters who cannot afford to buy now but will if prices drop. But a far greater number of renters will suffer due to lack of supply and like you say, it will be the most vulnerable.


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