Section 21 to be scrapped - what's the latest?

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Four months on from the government’s announcement that it plans to abolish Section 21, what’s been going on and what do landlords need to know?

Earlier this year, the government made the surprise announcement that it intends to remove Section 21 from the Housing Act 1988, casting doubt over how landlords will be able to regain possession of their properties in the future.

Section 21 notices currently allow landlords to regain possession of their property without providing a reason.

However, in its place, the government is proposing a new system under which landlords would be required to serve a Section 8 notice, providing a 'concrete, evidenced reason already specified in law' in order to regain possession of their property.

It's now been over four months since the original announcement in April, so what has been happening since?

Rental repossessions taking an average of four months

According to the latest figures from the Ministry of Justice, it takes private landlords an average of 22.5 weeks from making a repossession claim to regaining possession of their property through the courts.

This figure has risen from 21.6 weeks at the beginning of 2019 and the Residential Landlords Association (RLA) claims that it demonstrates a flawed system.

"The courts are unable to cope when landlords seek to repossess properties for legitimate reasons," said John Stewart, policy manager at the RLA.

He said that scrapping Section 21, which will lead to increased pressure on the court system, means the system must be reformed 'as a matter of urgency'.

Passionate calls for dedicated housing court continue

The RLA, among other organisations, has been passionate in its calls for a dedicated housing court, claiming that the existing system is inadequate.

The trade body recently carried out a large survey of landlords and letting agents and found that 91% of respondents support the idea of a dedicated housing court.

It then sent a letter to new Justice Secretary, Robert Buckland MP, warning that scrapping Section 21 with no changes to the court system could cause serious problems.

RLA policy director, David Smith, said that the plans to abolish Section 21 are some of the most 'far reaching the private rented sector has ever seen'.

"With landlords and tenants failing to secure justice in a timely fashion when things do go wrong, anything other than wholesale changes with proper funding to support it will lead to chaos," he said.

Could scrapping Section 21 encourage long-term tenants?

The lettings sector debate around the removal of Section 21 has largely been negative, with many landlords, agents and industry suppliers voicing their concerns about the government's proposals.

One letting agency, however, has said it is taking a 'more balanced view'. Paul Sloan, operations director for Haart, said that the proposals could increase security for tenants, allowing them to feel 'truly at home' and 'establish roots' in their community.

"It is of course in a landlord’s best interests to have long-term, good quality tenants, so the value of this cannot be underestimated," said Sloan.

He added the caveat that the Section 8 process needs to be changed quickly or it could cause problems for the industry.

"We are convinced a faster and more streamlined system will spell good news for the sector," he said.

"A reformed Section 8 notice will essentially mean that landlords can use the correct channels to evict problematic tenants, meaning that they do not have to circumnavigate the right processes to ensure a timely and efficient outcome."

Are benefits tenants set to suffer from Section 21 removal?

Meanwhile, another landlord organisation, the National Landlords Association (NLA), has claimed that renters on state benefits could be the biggest losers if Section 21 is scrapped.

Its survey of nearly 3,000 landlords found that 43% of respondents said they would become more selective when choosing tenants if they are no longer able to regain possession of their properties via Section 21.

The NLA says that due to high numbers of landlords who let to Universal Credit and Housing Benefit tenants experiencing rent arrears - currently a key reason for eviction via Section 21 - renters on state benefits could fall victim to the government's proposals.

"Rent arrears are the biggest problem that landlords face, and the main reason why they use Section 21 to evict a tenant," Richard Lambert, NLA chief executive said.

"So, if the government removes what they see as their only safety net — Section 21 — they will have no option but to become more selective."

"That will hit people on Universal Credit, Housing Benefit and other state benefits which have fallen way behind rents," he added.

At present, there is no timeframe on when Section 21 could be scrapped. However, it has been made clear that the government is keen to make the changes quickly.

The speed and formation of the new evictions system will now rest with the new ministers and team at the Ministry of Housing, Communities and Local Government.

Tracey Hanbury