Section 21 ban would devastate PRS

Section 21 ban would devastate PRS

9:48 AM, 30th September 2019, About 2 years ago 12

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The private rented sector (PRS) would shrink by 20% if Section 21 ‘no-fault’ evictions are banned, according to a new economic analysis report*.

A new deal for renters? The unintended consequences of abolishing Section 21, by Capital Economics on behalf of the National Landlords Association (NLA), also forecasts a 59% reduction in housing available to tenants on housing benefit or Universal Credit, and a potential increase in rents for 13% of properties.

  • 960,000 fewer dwellings available to renters
  • 770,000 fewer dwellings available to tenants on housing benefit or Universal Credit
  • 600,000 dwellings could see rent increases.

The report also suggested a possible solution, a reformed court process that made dealing with Section 8 cases faster and cheaper could nullify the removal of Section 21 for many landlords. However, the PRS would still see a likely reduction of between 180,000-390,000 homes, between 130,000-300,000 fewer homes available to benefit claimants, and rent increases for between 110,000-240,000 properties.

In an accompanying report by the NLA, Faultless or fault-based? The realities of the possession processes, case studies of NLA members’ experiences with both Section 21 and Section 8 outline the problems many landlords currently face with both processes, including losses in the tens of thousands of pounds.

Chris Norris, Director of Policy and Practice at the NLA, says: “The Government has clearly failed to recognise the realities of the private rented sector by proposing the abolition of Section 21.

“Any government which thinks it appropriate to risk the loss of nearly 1 million rental homes at a time of housing crisis needs to reassess its priorities as a matter of urgency.

“Rather than playing to the gallery, the Government should be looking to support and incentivise good landlords to remain active and provide homes to those who need them, rather than making it harder and causing these landlords to exit the market.”

The report is available to view here.



Comments

by paul robinson

12:29 PM, 11th October 2019, About 2 years ago

Previously I’d been in correspondence direct with the Ministry of Housing

Feel other HMO landlords should also be questioning why so many HMO’s and landlords have been “overlooked”?

NO RECOGNISITION OF HMO IN S21 CONSULATION DOCUMENT – FLAWED CONSULTATION?

My question on 2nd August:- Can the Q&A support document be updated to encompass shared HMO (licenced in particular), ensuring that this large sector’s feedback can be encouraged to be gathered and also easily analysed on receipt?

Ministry response on 4th September - We are exploring updating the document so to explain how the changes will interplay with joint tenancies, to help landlords understand how this will affect them, including landlords of HMOs.

Extract of my final response to Section 21 consultation:-

- Despite your response on the 4th Sept, as far as I can see no updates have bene undertaken? (nothing listed on the revision page) – so basically HMO and shared rentals have been completely ignored in this consultation?

- In the following government document, there were an estimated 497,000 HMOs in England and Wales at the end of March 2018. http://researchbriefings.files.parliament.uk/documents/SN00708/SN00708.pdf How is it possible that this ½ a million rentals have not been recognised, or their landlords even encouraged to reply to the consultation?

- When we spoke you suggested that the consultation document had been targeted towards “single household rentals” and HMO landlords could just use the “other” free text boxes.

- Other landlords I have spoken to and I would question the validly of this consultation process when HMO and shared rentals have been excluded and it is very difficult to understand how it will be possible to accurately analyse the “other” free text boxes that HMO landlords have had to use?

- Whist we hope sincerely hope that scrapping S21 is not a foregone conclusion, considering the above, we do question if it has just been rushed out in an incomplete form, somehow looking to win political votes with Generation Rent and supporting charities such a Shelter?


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