The abolition of Section 21 eviction notices could lead to a surge in evictions by private landlords anxious to sell before restrictions come into force, la legal practice claims.
The decision to overturn Section 21 of the 1988 Housing Act, which permits landlords to evict tenants without reason and with two months’ notice, was included in the Queen’s Speech last week. A White Paper and a Renters’ Reform Bill are expected to be released by the government shortly to indicate further details and a timetable.
Michael Stock, head of property department at London law firm OGR Stock Denton, says: “There will be many tenants evicted before legislation is passed .We will potentially see panic evictions and a surge in private landlords selling their rental properties.
“Consequently, we’ll see a reduction in properties in the private rental sector, the ripple effect of which will mean more stress on the rental market. It could cripple the sector. I don’t think this has been thought through at all.”
He's calling for more detail about how the law will affect landlords who require a tenant to vacate in order to sell a property.
"Landlords could now be held to ransom by a tenant who refuses to leave after the term of the lease is up. No buyer is going to hang around while the matter progresses through the courts. It’s all very well saying you can’t evict a no-fault tenant but there will be exceptions where a landlord wants to sell” says Stock.
The abolition of Section 21 was initially proposed by former Prime Minister Theresa May in April 2019.
The Conservative manifesto for the General Election later that year - by which time Boris Johnson was Prime Minister - pledged “private landlords will no longer be able to evict tenants from their homes at short notice and without a good reason”.
Stock is appealing for clarity for landlords who have genuine reasons to evict and has raised his concerns with Michael Gove, the Secretary of State for Levelling Up, Housing and Communities
He also predicts some tenants may use the greater protections to obstruct fair rent increases and that some landlords who want to reoccupy their properties or hand them to family could be hampered from doing so.
Stock continues: “I can see an argument for rules that stop unscrupulous landlords coming up with a sham sale or unilaterally putting up rent unreasonably to get a tenant out, but there will also be room for mischief from tenants who can dispute fair rent increases and just staying on where there is a genuine proposed sale, knowing a landlord can’t get their tenants out.”
Even under current rules, tenants can still fight Section 21 notices through the courts, and the process can take many months to evict tenants..
“There is a genuine fear that this is going to have a detrimental impact on landlords and their properties in several genuine scenarios, particularly small investors who have one or two properties and are hoping to sell one to release funds” insists Stock.
“I can’t see any drafting in the proposed legislation to cover such scenarios and it’s a potential own goal that the government is going to score with its traditional supporters.”
Want to comment on this story? If so...if any post is considered to victimise, harass, degrade or intimidate an individual or group of individuals on any basis, then the post may be deleted and the individual immediately banned from posting in future.
.jpeg)
.jpg)
.png)
Join the conversation
Jump to latest comment and add your reply
Many years ago someone proposed a Deed of Assurance which with minimal modification strikes me as exactly what would work for all parties now.
Something like if a tenant fully complies with the terms of the tenancy (pays the rent on time, doesn't behave in an anti social manner, etc) then should the landlord want to evict the tenant they would have to pay compensation of something like one or two months rent.
It would certainly clarify just how rare no fault evictions really are if it was coupled with improvements to Section 8.
It would incentivise tenants to prioritize paying their rent on time which would probably mean fewer landlords would want to sell up in the first place.
Why on earth should a Landlord ' PAY ' to compensate a tenant who has beached the agreement, or even if they haven't, - a landlord wants their property back ?
A landlord shouldn't pay to compensate a tenant who has breached the tenancy agreement. In reality landlords lose a huge amount when tenants breach, either in court fees or repair costs or lost rent.
Why should a tenant who has behaved impeccably suddenly be faced with having to pay moving costs purely because their landlord has had a change of mind?
How many professional landlords ever evict good tenants?
@ Jo Westlake.
Your third paragraph is the whole point of why repealing section 21 is not necessary.
In 30 years of letting and a 40 property portfolio I have never evicted a tenant for 'no reason'- there has always been a reason and I have still paid a heavy price.
It just doesn't make sense. It costs money to turn the property over and is a great deal of hassle I can do without.
Why can everyone else with any degree of commonsense see this and the loony politicians and antti landlord brigade can't?
@Saul, me too and for a similar period of time, I have only ever used section 21 to evict non payers.
I remember, just 6 years ago when I bought my first BTL - things were so much better for tenants before they had all this extra ‘protection’.
There were a lot of rental properties available, and because of this, prices were lower and the letting agent showed me the properties he had available - all nice inside, new bathrooms, new kitchens etc. He told me I need to be up to that standard otherwise I could expect longer void periods, lower quality tenants and less rent. I had to compete to get a tenant, and my properties had to be good quality to get a good tenant.
Fast forward to now, before Christmas I bought a property that was 20 years old with all the original kitchen bathrooms and carpets etc. While getting it refurbed, the letting agent put a sign on the wall (it’s a cul-de-sac so not much passing foot traffic). No marketing, but within a few days someone snapped it up - no quibbling over the rent charged, they viewed it before the refurb was done so it looked a mess inside - and when I checked Rightmove - there were no other 2 bed houses available, at all in the whole town (60,000 population). To be honest, I could have got away with doing almost nothing and just rented it out - something I am sure many will do.
To sum up in a sentence. The more the government gets involved the worse it will get, especially for tenants.
Couldn't have put it better myself Steve. That's exactly what my experience was pre-2015 before Osborne stuck his oar in. I still refurb to a high standard as that's how I do business. It does allow me to be very choosy over my tenants, and premium rates as well
If we have any suspect tenants now is the time to be evicting them while we still can, replace them with good working tenants with a guarantor.
The Lawyers are correct. And it is Government Policies that have have Caused a problem that did not exist. Prior to 2016.
Lets face facts, Many Landlords will have less than perfect Tenants. Which they are currently tolerating . because of the refurbs etc, Being stuck with them for life is not very appealing. So a ` Spring Clean ` May be in order.
Landlords are going to have to increase rents due to inflation , Taxation, constant regulation, Licensing, and looming EPC costs. I can also see further problems for lower paid and benefit tenants, who may have been in the property for years on low rents, Being un able to afford future rent increases , or massive increase in rent if they have to find new homes
Arears that used to have 100s` of properties to rent now only have a few so there are 60 plus tenants chasing every property.
When I Rent out a property it’s for the Contract Period, any extended stay is subject to a new Contract whether that be in Periodic form or New Tenancy signed. There is no automatic extension as of a right this is outside the terms of the let and cannot exist or there is no such thing as a Contract. This tin edge of the wedge that comes to mind getting their claws attached to ownership of your property.
This is a kin to the other letting scam out there dozens of LL’s getting taken-in, Renting with Purchase lease option watch out for this out, there are high level Courses they take for this one. They take Landlords for some mugs.
So the government target landlords relentlessly, we then decide we have had enough and start to sell…. then some lawyers decide its because of government legislation 😂😂. Maybe their next report should focus on why water is wet 🤨🤨, I have noticed a lot more stories in the Daily Fail and others on why landlords are selling up, maybe the message is getting through.
Riddle me this!!
It's 2028, I want to sell my house as I can't legally rent it out as EPC E, but the tenant won't move. So I get prosecuted for illegally renting when I don't want to?
How will anyone get a mortgage if you can't evict a tenant? If I give up on above house and default on payment how can bank repossess house when can't evict tenant?
I’m in the same boat as you with the same thoughts
You should take a business loan in this case rather than a mortgage.
Jo Westlake makes a good point.
Symmons, Banks & Lenders don’t have this problem they will always get vacant possession in a couple of months even though its not their property and not at serious risk. It’s your large Deposit or stake in the property that’s at stake. Their friends at the Council will look after them and help out. The special adverse treatment is reserved for us muppets.
With reference to Symon comment. Could we be facing £30000 fines. Google the Scottish Governments scheme.
For so many years now I - and all other Landlords - have heard the rhetoric from Governments - and Assemblies - that increasing levels of legislation are required to "get rid of rogue and bad Landlords", unfortunately many such operators are still in existence.
Indeed, with the number of established/longer term Landlords either considering or actually starting to sell their properties, it is likely that, either the rogue element will flourish or, newbie Landlords will enter the market and will not be fully aware of their responsibilities under the myriad of legislation.
Governments and the Assemblies do need to touch base with the realisms of the situation instead of their bubbles of fantasies and idealisms, if not there will be an even larger housing problem, all as a result of their own incompetence.
Please login to comment