On April 15 the government announced controversial plans to axe Section 21of the Housing and Planning Act, sending shockwaves through the landlord community. Here RLA policy director David Smith looks at what happens next.
Section 21, the so-called ‘no fault eviction’ has been a hot topic – in the media and Westminster – for some time now.
Over the last 12 months we have seen more and more column inches devoted to the subject – with investigations from the likes of Panorama painting a picture of a sector dominated by landlords evicting families from their homes at the drop of a hat.
Combine this with a government acutely aware of the importance of the tenant vote and a snap election a distinct possibility and you can see how the lure of a headline-grabbing announcement on a pro-tenant policy was too strong to resist.
While there is no denying there are bad landlords out there, we know that the vast majority are decent, law-abiding people who have chosen to invest their cash in property and would have no desire to lose good tenants who pay their rent in full and on time.
Contrary to the mis-reporting and stories put forward by some, most landlords do everything they can to help their tenants.
It is unfortunate that stories of bad landlords have been put forward as the experience of most tenants and it represents a failure of government to look at the facts calmly that this has been successful.
The most recent figures from the English Housing Survey showed that, when asked about their most recent move, only 10% of private renters said their landlord or agent ended the tenancy.
Landlords often make all sorts of concessions to keep hold of reliable tenants, and our research shows that in the overwhelming majority of cases landlords have good reasons to regain possession.
It could be that they or a family member need to move into the house or they may want, or need, to sell it. The tenants may be in significant arrears or causing a nuisance to neighbours.
All these are valid reasons for repossession, and it is vital that landlords’ rights to repossess are protected in these cases.
The government’s decision to abolish Section 21 could be seen as using a sledgehammer to crack a nut.
However, it has been clear for some time that improvements needed to be made to the repossession process and that the 30-year-old legislation needed updating to remain fit for purpose – for tenants and landlords.
Latest figures from the Ministry of Justice show landlords are now waiting longer to repossess properties for legitimate reasons, with the average time for a private landlord from claim to repossession 17.3 weeks.
This is not good enough.
Heather Wheeler, in her article for the RLA’s members magazine this month promises court reform for possession matters and says Section 8 will be amended to give landlords further grounds to repossess, which is good news.
In practice, the success of the government’s plan will depend very much on the robustness of this amended Section 8 process and the court process that goes with it, which must be both swift and effective, and could require significant investment.
These changes are vital if the government goes ahead with its proposal, and with Scotland already scrapping its equivalent of section 21 and Wales planning the same, it is highly likely that it will.
It is also essential that these changes are made, and – importantly – given time to bed in, before Section 21 is removed.
The government’s plan is a risky one.
At this time of housing crisis, it can ill afford a mass exodus of landlords from the private rented sector.
With increasing numbers of people, including families looking to the sector for a home, landlords must have the confidence to remain in the PRS and continue to invest.
However, we have concerns that, in a market where demand exceeds supply, landlords will shy away from any tenant that they perceive as a risk.
This is likely to undermine the current efforts to persuade landlords to accept tenants on benefits or other groups that could be perceived as ‘high risk’, which could cause big problems further down the line.
More critically, the real difficulty in getting rid of section 21 is the myth that it will somehow lead to a nirvana where anyone who wants to buy a house will be able to do so.
The sad reality is that in the most pressured markets, mainly in London and the South-East, there would not be enough properties for all the potential buyers even if every landlord were to sell.
There is a pent-up demand with young people living with their parents and many living in house shares.
Even if houses were to appear on the market and prices to fall to a level that these people could afford there would still be insufficient property to meet the need.
Landlords are being made scapegoats for a consistent failure by successive governments to deal properly with the problems of the planning system and to build enough of the right types of property where people need them.
Coupled with this is a failure to invest sufficiently in our national infrastructure and in areas outside the South-East so that there are sufficient opportunities in every part of the country for people who need them.
If a ban on Section 21 does not improve things for young people as the government and some other commentators have suggested it will or, even worse, proves to be a retrograde step as the RLA believes, then we will have started to reach the bitter end of consistent failures in housing policy.
The RLA remains committed to fighting for landlords’ rights to continue to use Section 21 effectively and is currently involved in a case on this issue at the Court of Appeal.
Since the government’s announcement on Section 21 was made I have been to Number 10 for meetings on the consultation process, with the RLA running a survey, asking for experiences of the repossession process and details of the assurances landlords need to continue renting properties.
This will help inform our response once the government consultation is made public.
The government is relying on landlords to provide the homes to rent that this country so desperately needs, and we want Minsters to recognise this when it comes to developing a new, robust repossession process that works for all.”
- To take the RLA’s survey, to ensure your voice is heard click here.