Should I sell or risk tenants buying at undervalue price?9:08 AM, 25th September 2019
About 3 weeks ago 48
PRS warns of “serious dangers” to the supply of rental housing for vulnerable tenants as a result of government plans to axe Section 21.
The Government is proposing a consultation on the abolition of Section 21, so called ‘no fault’, repossessions in the private rented sector in favour of improving the court system to ensure landlords can more speedily repossess properties through them in legitimate cases.
David Smith, Policy Director for the Residential Landlords Association said:
“Whilst the RLA recognises the pressure being placed on Government for change, there are serious dangers of getting such reforms wrong.
“With the demand for private rented homes continuing to increase, we need the majority of good landlords to have confidence to invest in new homes. This means ensuring they can swiftly repossess properties for legitimate reasons such as rent arrears, tenant anti-social behaviour or wanting to sell them. This needs to happen before any moves are made to end Section 21.
“For all the talk of greater security for tenants, that will be nothing if the homes to rent are not there in the first place. We call on the government to act with caution.”
Government data shows that on average tenants live in their rental properties for over four years and that in 90 per cent of cases tenancies are ended by the tenant rather than the landlord.
The Residential Landlords Association is warning that at a time when the demand for rental homes is outstripping supply, especially among vulnerable tenants, the Government risks exacerbating the problem if it does not ensure that landlords have complete confidence that they can repossess properties swiftly for legitimate reasons. These include tenant rent arrears, tenants committing anti-social behaviour and landlords wanting to sell their properties.
With the Government’s own data showing that it takes over five months from a private landlord applying to the courts for a property to be repossessed to it actually happening, the RLA argues that it is vital that a reformed and improved court system is able to bed in and the grounds to repossess properties are properly improved before making changes to Section 21. This would follow the lead set in Scotland.
Research by Manchester Metropolitan University for the RLA has found that in a large majority of cases where tenants are asked to leave their properties under Section 21 notices there is a clear reason. Half of the notices are used where tenants have rent arrears, are committing anti-social behaviour or damage to the property. Other common reasons include the landlord needing to take back possession of a property for sale or refurbishment. The report’s authors argue that this “raises questions” about whether the use of Section 21 notices can properly be described as ‘no fault’ evictions, as some have called them.
The RLA will shortly be consulting the landlord community to establish what measures would be needed to ensure they have confidence in the system before efforts are made to end Section 21 repossessions.
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