Abolishing the use of Section 21 notices to evict tenants would lead to a dearth of private rental properties across the UK, a new economic analysis report shows.
The report by Capital Economics on behalf of the National Landlords Association (NLA) forecasts that there will be a 20% drop in the number of properties available to rent if the most common route private landlords can take to regain possession of their property under the Housing Act 1988 is scrapped.
The report, ‘A new deal for renters? The unintended consequences of abolishing Section 21’, also predicts that a 59% reduction in housing available to tenants on housing benefit or Universal Credit, and a potential increase in rents for 13% of properties.
The report, which you can read here, also suggested a possible solution, a reformed court process that made dealing with Section 8 cases faster and cheaper could nullify the removal of Section 21 for many landlords.
But even under the proposed change, the PRS would still see a likely reduction of between 180,000-390,000 homes, between 130,000-300,000 fewer homes available to benefit claimants, and rent increases for between 110,000-240,000 properties.
Chris Norris, director of policy and practice at the NLA, said: “The government has clearly failed to recognise the realities of the private rented sector by proposing the abolition of Section 21.
“Any government which thinks it appropriate to risk the loss of nearly 1 million rental homes at a time of housing crisis needs to reassess its priorities as a matter of urgency.
“Rather than playing to the gallery, the government should be looking to support and incentivise good landlords to remain active and provide homes to those who need them, rather than making it harder and causing these landlords to exit the market.”
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Section 21 makes little sense. My hope is that time will show what a poor decision this has been and it will be eventually altered.
Govt fails to understand that LL are so precisely because the S21 process is available.
If S8 doesn't effectively mirror the S21 process then LL will give up.
They are not prepared to be held hostage by their tenants.
Make no mistake by removing the power from LL to control their business will cause them to give up AST lettings.
There can be little point in replacing S21 with an enhanced S8 process.
Without a process that is almost identical to the current S21 process then LL will feel vulnerable and justifiably so!
S21 ISN'T a non-fault process.
Most S21 were issued because of rent defaulting tenants and therefore entirely fault based.
Very few LL issue S21 without just cause.
But it must be remembered that even if S21 is used it can still take over 10 months to achieve Eviction.
So all the propaganda that LL can evict after a 2 month S21 is a complete fallacy.
Not one of my rent defaulting tenants that I issued S21 to vacated at the expiry of the 2 month S21 notice.
I had to go through a lengthy and costly eviction process.
Costly for the reasons of court fees and defaulted rent.
S21 though being far from perfect was always more reliable than S8.
Without a robust and workable possession process LL simply will stop letting to AST tenants.
Or they may let to unrelated sharers as it would be highly unlikely that they would all default on rent at the same time.
But without S21 it becomes very risky letting to single household tenants.
RGI is probably the only way LL would risk it.
This is very hard for tenants to qualify for.
Lots of tenants will struggle to source LL prepared to take them on.
For those reliant on HB well they can simply forget any idea of LL wanting to let to them!!!
PB See my note below but this now seems to have gone for some reason.
What I said was 'They are not prepared to be held hostage by their tenants' is a brilliant line and could we spread this through the media somehow?
The lose of sec 21 will certainly hit the dross element of tenants, it will be the case of '' gold plated tenants'' only need apply.
Such a shame these important facts will never be broadcast on mainstream media, or we may see some progress if people have their eyes opened to the reality rather than listening to the continued propaganda from the likes of the BBC and shelter
I emailed Shelter recently explaining why I needed to use a Section 21 a couple of times on bad tenants, ie. Tenants using drugs on my premises, tenants making loud noises and fighting causing the police to be called, subletting, etc, etc. Needless to say, I've received no response back from them.
I have owned property since pre 1988 and only decided to become a landlord when the Section 21 act came in. I have never needed to use a Section 21 but have now decided to sell up with the pending loss of Section 21 being the deciding factor.
Why would they want to scrap section 21 & replace it with inferior Section 8 which is worse unless to Penalize & make us suffer even more.
Why would they give Landlords Rent to a Housing Benefits claimant instead of the landlord, that means they are deliberately given the Tenant a 2 months head start on arrears.
Why do the authorities & others keep banging on about High Rents and un-affordable Housing, when they themselves are the main driver of high Rents & un-affordable / loading billions of £'s onto the cost of the Private Rented Sector, for me they have cost me tens of thousands of £'s alone,
Licensing Schemes some repeated 3 times now, changing my beautiful Magnet 6 panel mahogany doors that cost £250 each to purchase alone, then replace with so called fire doors that are hardly fit to hold the screws. Then putting hand basins in every room at huge cost, service pipes / waste pipes in some cases drilling through concrete floors, then changed their minds no longer a requirement & Tenant didn't want them because they want computer desk instead, not funny. God knows how many certificates to be done again & again, Right to rent, How to rent, No Deposits, Claw backs, Banning orders, Confiscation Orders, S21. S24. Article 4, Criminalization of LL previously Civil matter, Fee ban, all this while we pay for them & everything else, they pay for nothing, nothing, nothing, now they want to turn around and say Rents are too expensive that they caused.
They (the Government) are after the populist vote and have fallen for the sophistry peddled by Shelter, Generation Rent, Acorn, et al. that abolishing Sec.21 will benefit Tenants (it won't)
They also feel it pulls the rug from beneath Labour
You are clearly the archetypal good LL who has tried to comply with all the stupid anti-LL policies and yet finds it has really been all for nought.
You are probably no better off income wise than 10 years ago due to all these cost burdens caused by these bonkers policies etc.
It cannot be the case any longer that LL are prepared to tolerate the vile and appalling propaganda levelled against them by vile organisations like Shelter and GR.
The demographics of a lot of LL are such that for many of them cashing out early makes supreme business sense.
I forsee many more LL getting out of the AST lettings market.
Things won't change until the PRS had returned to the appalling state it was in back in the 70's.
When that occurs then everyone will realise how bad all the anti-LL policies have been.
Then the response will have to be as before.
So S21 etc reintroduced!!
The problem is most LL don't have the time left to wait for this situation to occur so they might as well leave now!!
@paulrobinson
Unfortunately my line regarding hostages to fortune is NOT something that is even considered by Govt.
There seems to be a weird Govt understanding that LL will remain LL come what may.
They seem to forget LL are operating businesses!
Like any other business if the risk and viability becomes impossible then LL will sell up or change away from the AST business model for single households.
There is no financial imperative for LL to remain LL if their business becomes unviable.
Govt by it's incompetent actions is hastening many LL to give up.
Unfortunately media is not the slightest bit interested in the viability or otherwise of private LL.
What nobody ever advises is if LL give up who is magically going to house all the evicted tenants!?
Media does not even address this issue.
I don't understand why the media refuses to address this fundamental issue.
I believe they are so driven by their ideological hatred of LL that they refuse to consider things from a logical perspective.
That is what LL are up against.
We LL don't stand a chance against such endemic ideological hatred.
If we can't cope then we have to determine whether we wish to continue.
Unfortunately this ideological hatred is resulting in the bonkers anti-LL policies.
Personally I cannot cope with the risks and issues this hatred is causing and have determined to leave the PRS.
It seems many other LL have come to and are coming to the same conclusions.
Tory, labour, lib-dem, GR and shelter all want us gone, so what happens to our properties when we sell up, maybe some tenants will be able to buy them and become owner occupiers, with the responsibility of paying the mortgage every month , and paying for the ongoing repairs and maintenance, most tenants have not got a hope in hell of ever getting a mortgage, many of our properties would not pass a mortgage survey, = big increase in people sleeping in shop door ways, we will see what the future holds.
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