Fair Rents (Scotland) Bill or Artificial state manipulation of free market rent?10:34 AM, 6th November 2020
About 4 weeks ago 36
Last Friday Melanie Onn MP had an article published in The House, Parliament’s Magazine. Melanie Onn is Labour MP for Great Grimsby and shadow minister for housing. Towards the end she wrote “We’d also tighten up tenancy rules to help prevent private evictions, now the leading cause of statutory homelessness, by banning section 21 evictions.”
When I saw it on Monday I put a comment below the article. To make sure she saw it I also sent her an email the same day, with a copy to John Healey, Shadow Secretary of State for Housing.
Neither has replied so far.
The subject of the email was “Shelter’s website says Section 21 does not cause homelessness.” I thought it would surprise them and catch their attention. The email read as follows:
Dear Ms Onn
I read your article about homelessness in The House magazine of 12 October with interest. Click Here
I’m afraid you have been misled by Shelter’s CEO and its Head of Research who have both – on separate television programmes – misrepresented the results of Shelter’s research to the general public.
The termination of a tenancy is not in fact the cause of homelessness. That is like saying that someone’s unemployment was caused by his dismissal.
If an employee is dismissed for theft, the cause of his unemployment is the theft, not the dismissal letter. If a tenant is evicted for not paying the rent or for damaging the property or for anti-social behaviour, one of those is the cause, not the Section 21 form.
Shelter’s own website explains that the cause of the termination is whatever triggered the eviction. “The three main reasons for having lost a last settled home, given by applicants for homelessness support from local councils are:
However, these reasons are only the catalysts that trigger people into seeking assistance, and not the underlying issues that have caused the crisis to build up in the first place.” Click here
The cause of the eviction is usually bad behaviour by the tenant – landlords do not want to evict good tenants. But recently George Osborne’s levy on mortgage interest – Section 24 of the Finance (No.2) Act 2015 – has forced some landlords either to sell up or to increase the rent in order to pay the levy (making themselves no better off). Housing benefit claimants who have not had a rent increase for years cannot afford the levy and are being replaced by people who can.
Since June 2017 Shelter’s website has also given the real reason for homelessness: “The inability to find a new place to live once a short term tenancy ends is a leading cause of homelessness in Great Britain. New research by Shelter identifies a number of reasons why people on low incomes are increasingly unable to find a home and secure a tenancy in the private rented sector. ” Click here
“the most important reason is the shortfall between housing benefit and the cost of private renting,” Click here
The shortfall is increasing because Local Housing Allowance (LHA) rates were frozen in 2016.
Section 21 is not the cause of eviction, it is merely the process through which it occurs.
Without S 21, tenants would have tenancies for life, which is what caused a shortage of rental accommodation in the last century, together with rent control.
Sitting tenants reduced the sales value of properties considerably. By definition, the only people who would buy them were landlords, drastically reducing the pool of potential buyers. So when one finally became vacant it was sold, reducing the supply.
It was Section 21 of the Housing Act 1988 that allowed an alternative to lifetime tenancies, and so gave landlords the confidence to increase the supply of rented accommodation, which had been shrinking for decades.
Most landlords own only one or two properties. If they had no way of recovering them they would not rent them out in the first place, and the supply would shrink once again. There would be less choice for tenants and rents would be higher. Less choice and higher rents are what Generation Rent is campaigning for by attacking S 21.
Abolishing S 21 will not prevent homelessness. On the contrary, abolition of s 21 will increase homelessness as landlords flee the market. Nobody wants that.
Please Log-In OR Become a member to reply to comments or subscribe to new comment notifications.
Our mission is to facilitate the sharing of best practice amongst UK landlords, tenants and letting agentsLearn More