Government proposes to scrap Section 21 evictions

 
Government proposes to scrap Section 21 evictions.jpg
 
 

With the government recently announcing plans to scrap Section 21 notices, we look closer at what was announced and how the rental industry reacted to the news. 

In an unexpected move, the government recently proposed to scrap the divisive and controversial Section 21 eviction process.

The announcement by Housing Secretary James Brokenshire, and personally backed by Prime Minister Theresa May, said the plan to consult on scrapping Section 21 represented ‘the biggest change to the private rental sector in a generation’.

If, as seems likely, the public are in favour of the plans to remove so-called ‘no fault’ evictions, Section 21 notices could be scrapped before the year is out. 

Brokenshire said the government’s hand was being forced because evidence suggests that Section 21 evictions are one of the biggest triggers of family homelessness.

“By abolishing these kinds of evictions, every single person living in the private rented sector will be empowered to make the right housing choice for themselves - not have it made for them,” he said when announcing the plans.

What will change?

If the government’s proposals are introduced, landlords would need to provide a ‘concrete, evidenced reason already specified in law’ if they wish to bring tenancies to an end. As things stand, landlords can use Section 21 against a tenant without providing a reason.

Theresa May insists this major change to the lettings sector will safeguard responsible tenants from unethical landlords, while also offering them the ‘long-term certainty and the peace of mind they deserve’.

In a statement, the Ministry of Housing, Communities and Local Government said that court processes will be accelerated so landlords can swiftly and smoothly regain their property where rent arrears or damage to the property occurs, ‘meaning landlords have the security of knowing disputes will be resolved quickly’.

The removal of Section 21 would see landlords seeking to evict tenants needing to turn to Section 8 as an alternative. This notice can be used when a tenant has fallen into rent arrears, been involved in criminal or anti-social behaviour or broken terms of the tenancy agreement, for example causing damage to the property. 

In an effort to reassure landlords, the government has promised to amend Section 8 to allow it to be used by landlords if they want to sell the property or move back in themselves. That said, challenges by tenants to Section 8 notices are far more commonplace than they are for Section 21.

As well as the proposal to consult on the removal of Section 21, the government put forward plans to eliminate insecure fixed-term tenancies and replace them with open-ended tenancies.

A furious backlash

Although campaign groups such as Generation Rent and Shelter fully welcomed the announcement, hailing it as a victory for private renters, the reaction from inside the lettings industry was, unsurprisingly, far less positive. 

The Residential Landlords Association (RLA) warned that a ban on Section 21 repossessions could carry severe dangers.

“Whilst [we] recognise the pressure being placed on government for change, there are serious dangers of getting such reforms wrong,” David Smith, RLA policy director, commented. “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, he insisted, included ensuring that landlords can swiftly repossess properties for legitimate reasons such as rent arrears or anti-social tenant behaviour, as well in those situations where landlords are looking to sell. 

“This needs to happen before any moves are made to end Section 21,” Smith added. “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.”

The RLA said the government risks worsening the supply-side crisis at a time when demand is higher than ever, while also calling for a reformed and improved court system to ensure the capability of landlords to repossess properties is properly improved.

David Cox, chief executive of ARLA Propertymark, also warned of the possible dangers of banning Section 21 evictions. “Although in the majority of cases there is no need for Section 21 to be used, there are times when a landlord has to regain possession of their property. An end to Section 21 could be devastating for existing supply in the private rented sector and on new landlords considering investing in buy-to-let.”

The National Landlords Association was similarly damning of the plans. “Landlords currently have little choice but to use Section 21,” Richard Lambert, NLA chief executive, said. “They have no confidence in the ability or the capacity of the courts to deal with possession claims quickly and surely, regardless of the strength of the landlord’s case.”

He added: “The government should look to Scotland, where they reformed the court system before changing how tenancies work. If the government introduces yet another piece of badly thought-out legislation, there will be chaos.”