x
By using this website, you agree to our use of cookies to enhance your experience.
STAY CONNECTED!
    
newsletter-button

TODAY'S OTHER NEWS

Scrapping Section 21 could fuel a rise in homelessness, warns Landlord Action

Tenant eviction specialist, Landlord Action, reports that up to half of Section 21 cases they handle are as a consequence of tenants wanting to be re-housed by the council. 

The company fears that the scrapping of Section 21, and subsequent expansion of Section 8, could put thousands of tenants at greater risk of receiving a County Court Judgement (CCJ) and ending up homeless as local councils will not be obliged to re-house those with rent arrears judgements.

Some 95% of Section 8 cases are for mandatory two months’ rent arrears, according to Landlord Action, and although it is unknown how many Section 21 cases are as a result of rent arrears, the evictions firm says it is the number one reason landlords serve notice. 

Data from the Ministry of Justice reports that there were 22,527 accelerated possession claims issued in 2018 (section 21 claims). Of those accelerated possession claims under Section 21, 10,127 resulted in evictions carried out by County Court bailiffs. 

Therefore, if landlords are forced to use Section 8 route in the future, thousands more tenants will have rent arrears judgements against them, rather than simply being evicted using Section 21. 

In addition, more tenants could find themselves with a County Court Judgement (CCJ), which will severely impact their future credit rating.

Paul Shamplina, founder of Landlord Action, commented: “Local councils will see when a tenant has a rent arrears possession order made against them so will consider that that tenant has made themselves homeless. Therefore, the council will not be obliged to re-house them as they do at present under Section 21 accelerated procedure. 

“If those tenants cannot get accommodation in the private rented sector and cannot be re-housed by the council, what will happen to them?”

Shamplina also believes the figures demonstrate that the number of Section 8 hearings will double because landlords who would previously have used Section 21 will use Section 8. This will double the amount of court time before judges that is required, meaning that a major recruitment drive of judges will be required to deal with the increased number of hearings.

Recently, MHCLG attended Landlord Action offices shadowing the solicitors and paralegal staff to gain a greater understanding of the possession process, and what impact reforms to Section 8 and court processes could have. 

Shamplina added: “As well as a rise in homelessness, I believe there will be many other unintended consequences following the abolition of Section 21. These will include, but not be limited to; vulnerable tenants struggling to find accommodation as landlords become more selective; a surge in Section 21 claims as landlords feel increasingly powerless and opt to exit the market.  A shrinking private rented sector will result in further rent rises for tenants. 

“In addition, unless anti-social behaviour is tackled within the reforms, unruly tenants will have the opportunity to remain in properties for longer causing landlords and their neighbours unnecessary stress.” 

With the government consultation on Tenancy Reform ending on 12th October, Landlord Action is urging all landlords and lettings agents to have their say and complete the survey as a matter of urgency.

Poll: Do you think scrapping Section 21 could fuel a rise in homelessness?

PLACE YOUR VOTE BELOW

  • icon

    There is absolutely no doubt it will increase homelessness, but the government is prepared to worry about that later as winning generation rent votes is top priority at the moment

  • icon

    It's going to be ''if in doubt don't rent to them'' we can no longer take any risks with who we let into our properties.

  • icon

    I think the best idea is for the state to build and buy property as an alternative to the private rental sector allowing all private landlords to exit the market for good and just maybe the renters might actually get a home for life again and sparing the Landlords the stress of having to rent out property and all the problems it creates for them and can go find somewhere else to park their money, just a thought

    icon

    Most tenants are good tenants, we like them and they are welcome to stay as long as they like, the problem comes when we get a bad tenant which we all do from time to time we need them gone a s a p

     
  • Paul Barrett

    S21 abolishment will be the least of LL problems.
    Labour has just announced RENT CONTROLS.
    That along with Tenant RTB just about terminates the viability of letting on AST's to single households.
    Even with multiple households rent controls still kill off the business viability of the PRS
    So that is it for the PRS!!
    Time to sell up if you reckon Labour will be in power.
    Anyone prepared to gamble Labour NOT assuming power in the next 10 years!?
    I'm NOT so I will be offski!!

    Neil  Hayward

    I'm with you Paul .. it's a sure fire bet that things will only get worse, and I'm not going to wait for a last minute change of heart ... all parties have it in for LL and Labour want to go to much further ... we can't stand idle whist they pick our pockets ... I only have 3 flats so the first is on the market now with the section 21 issued .. whilst I can .
    I hate to say it ... But I do hope this monster they have all created comes back to haunt them .
    We are thinking about investing in a single property holiday let that we can then use in the winter months ... best of luck in what ever route you take .

     
  • Paul Barrett

    I've got 4 flats to get rid of.
    So that will be 14 homeless tenants soon.
    BrExit is just stopping me selling them.
    I wish to sell for maximum retail price which is not currently possible while BrExit uncertainty exists.
    I should have sold when S24 was announced but prevarication could cost me dear!!I
    I certainly intend to have nothing to do with normal lettings.
    Lodgers presumably won't be subject to RENT CONTROLS.
    So investing in multiple residential homes with no more than 4 bedrooms will be my objective to avoid any Mandatory HMO Licensing.
    I will also live in them for at least 1 day every tax year.
    I will also avoid any Selective Licensing or Additional Licensing areas just in case I do choose to let on AST.
    If lodgers come under rent control then your FHL idea might be something worth my investigating seeing as I am staying in a coastal area.
    I believe Staycations will become far more common and could be a viable income generator more so than potentially rent controlled AST rents.
    It makes things a lot easier to self-manage if you are near the FHL

  • icon

    I’ve got 80 units so Gunna be tough but I am selling all my houses in good areas where RTB May affect me then I’m buying in the sun to let through Airbnb untill my kids are older then I will spend a lot of time there. You have to be one step ahead and I’m not giving my hard earned asssts over through ridiculous communist policies I navigated s24 through being ahead of the game this is just another red flag that needs addressing .

  • Paul Barrett

    Lucky you could avoid S24.
    I can't and so that was causing me to sell well before the latest bonkers policies.
    The PRS is really like the Titanic.
    Severely holed and definitely going down.
    The Question is how long it will take?
    I intend to be in one of the lifeboats well before the PRS disappears below the waves!!!
    My understanding is that Portugal has an encouraging tax regime for anyone choosing to invest or buy property there.
    The Algarve and it's enclave sounds attractive.
    I also understand that unlike Spain there is no chance of your property being bulldozed and you having to pay for it due to past mayoral corruption.

    icon

    That’s where I’m looking Portugal

     
icon

Please login to comment

Zero Deposit Zero Deposit Zero Deposit
sign up