Industry coalition calls for Section 21 to be retained
As the government's plans to scrap Section 21 gather pace, a collection of industry organisations is campaigning for more certainty before changes are implemented.
Earlier this year, the industry was taken by surprise when the government announced plans to scrap the Section 21 evictions process. Currently, Section 21 evictions provide landlords with the means to regain possession of their property for legitimate reasons without having to go through the courts.
When announcing its proposals, the government argued that a new system would provide tenants with 'long-term certainty and peace of mind'. It has proposed that Section 21 will be replaced by an improved Section 8 notice and court procedure.
The reaction from those operating in the rental sector has been far from positive, with many market commentators arguing that scrapping Section 21 will make it virtually impossible for landlords to regain legitimate possession of properties in a timely and efficient manner. With the government's plans expected to move quickly, a collective of influential industry organisations have come together to form the 'Fair Possessions Coalition'. The organisations taking part are: ARLA Propertymark, Cornwall Residential Landlords Association, Country Land and Business Association, East Midlands Property Owners, Eastern Landlords Association, Guild of Residential Landlords, Humber Landlords Association, iHowz, Landlord Action, Leeds Property Association, National Landlords Alliance, National Landlords Association, North West Landlords Association, Portsmouth and District Private Landlords' Association, Residential Landlords Association, Safe Agent, South West Landlords Association and Theresa Wallace (Chair, The Lettings Industry Council).
The coalition argues that landlords prefer to have long-term, reliable tenants in their properties, with the average tenancy length increasing to over four years, according to the latest English Housing Survey. However, it says that in those cases where that isn’t possible, landlords should have confidence that there is a system in place which allows them to swiftly and easily regain possession of their property. The organisations say their research shows the overwhelming majority of landlords who use Section 21 evictions do so for legitimate reasons such as rent arrears, property damage or anti-social behaviour. The proposal to require landlords to use Section 8 notices to repossess property will be ineffective, the coalition says, as the grounds make it difficult to address the problem of anti-social behaviour and don't include the key legitimate repossession reason of wanting to sell a property.
What is the coalition asking for?
The coalition is urging the government to retain the Section 21 process until a new system which provides landlords with the same level of confidence about legitimate repossessions is put in place. It says that 'tinkering' with the current system is not enough and has instead called for a 'comprehensive overhaul' of the regulations which lay out clear grounds for repossessions which criminal landlords and unreliable tenants can't exploit. There is also a warning that the government's plans to scrap Section 21 and introduce 'indefinite' tenancies could pave the way for rent controls to be introduced, which the coalition says could be 'highly damaging' and lead to a significant reduction in supply.
The overhaul the coalition is calling for includes:
Making sure there are clear and adequate periods of notice given by a landlord when seeking repossession. Implementing applications to repossess properties that are easy to use so landlords are not required to invest considerable sums of money for legal representation. Making rights for a tenant to challenge an application easy to understand.
Introducing an initial starter tenancy, before it switches to the indefinite model proposed by the government. Making sure there are safeguards in place so tenants are protected against the minority of landlords who abuse the system. Lowering the level of evidence landlords have to produce when making a repossession application. Implementing a minimum fixed-term before which a tenant is not able to serve notice to leave the property. Establishing a dedicated and properly funded housing court to address the failures in the current system.
Further industry reforms needed
Alongside an overhaul of the repossessions process, the coalition says there should be a broader package of reforms to support good landlords and renters. It says there should be an end to the housing benefit cap, providing all Universal Credit claimants with the option to choose for the housing element to be paid directly to their landlord.
Meanwhile, there should be more done to encourage sales of properties with sitting tenants and the development of new rental homes. There is also a call for proper implementation of the Homelessness Reduction Act to ensure the practice of councils telling tenants to wait until bailiffs arrive before leaving a property when a court has already agreed for it to be repossessed. The coalition says more resources for local councils would help to bring this unhelpful practice to an end.
It says the bailiff system should also be improved and potentially privatised in line with the High Court Enforcement Officer system. The reason for this, according to the organisations in the coalition, is that it would relieve the Ministry of Justice from funding the service with the costs instead levied on service suppliers.