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Section 21 to be banned in England

The Government has announced its intention to scrap Section 21 notices for eviction, in an effort to protect renters from "unethical" landlords and give them more long-term security, effectively creating open ended tenancies for all private renters.

The Government has announced its intention to scrap Section 21 notices for eviction, in an effort to protect renters from "unethical" landlords and give them more long-term security, effectively creating open ended tenancies for all private renters.

According to the announcement, Section 8 evictions are also set to be reformed, with a consultation launching shortly.

As it stands at the moment, section 21 notices allow landlords to evict renters without a reason at the end of their fixed-term tenancy. However, under the government's new plans, landlords would be required to provide 'concrete, evidenced reason already specified in law' in order to bring tenancies to an end.

The Housing Secretary, James Brokenshire, said the government's latest move to reform the PRS was "the biggest change to the private rental sector in a generation" and insisted the government would ensure "responsible landlords can get their property back where they have proper reason to do so"

According to Mr Brokenshire, the government was taking action because evidence showed that Section 21 evictions were one of the biggest causes of family homelessness.

He concluded: "By abolishing these kinds of evictions, every single person living in the private rented sector will be empowered to make the right housing choice for themselves - not have it made for them."

Jeremy Leaf, north London estate agent and a former RICS residential chairman, says: "This announcement is perhaps more political than practical in that the government wants to be seen to be recognising the plight of possibly only a small number of millennials, in particular, who are frustrated by evictions at short notice and with little justification.

On the ground, we don’t find this happens frequently at all so hope that a thorough evidence-based consultation will flush out the extent of the problem. This will ensure that landlords do not desert the sector unnecessarily; if they did, it would only result in further upward pressure on rents and affordability issues."

Tamara Sandoul, Housing Policy Manager at CIEH, said: “Housing conditions and tenant protections live side by side.

Tenants have long been put off making legitimate complaints about poor conditions and disrepair due to the fear of being evicted for no reason and at short notice. We welcome the Government’s bold move to end Section 21 evictions. This is a big step forward and should give tenants greater security, which they will need in order to challenge poor conditions.

We also recognise that there will be legitimate reasons for landlords to recover their property. These reasons should also be properly explored and addressed in the proposals.”

Guaranteed chaos

However, many working in the PRS were dismayed by todays news and claimed that tenants are rarely evicted via Section 21 notices unless their landlord has a genuine reason for needing their property back, such as selling or needing to undertake major works.

The National Landlords Association lambasted the proposals, citing the Governments own figures that '90 percent of tenancies are ended by the tenant. Of the tenancies ended by the landlord, the majority are ended because of rent arrears'

Richard Lambert, CEO of the NLA, says: “Landlords currently have little choice but to use Section 21. They have no confidence in the ability or the capacity of the courts to deal with possession claims quickly and surely, regardless of the strength of the landlord’s case.

England’s model of tenancy was always intended to operate in a sector where Section 21 exists. This change makes the fixed term meaningless, and so creates a new system of indefinite tenancies by the back door.

The onus is on the Government to get this right. It’s entirely dependent on the Government’s ability to re-balance the system through Section 8 and court process so that it works for landlords and tenants alike. The Government should look to Scotland, where they reformed the court system before thinking about changing how tenancies work. If the Government introduces yet another piece of badly thought-out legislation, we guarantee there will be chaos.”

 

David Cox, Chief Executive, ARLA Propertymark responded to the news: “Today’s news could be devastating for the private rented sector and landlords operating within it.

The effects of the tenant fees ban have not yet been felt, and now the Government is introducing more new legislation which could deter landlords from operating in the market. Although in the majority of cases there is no need for Section 21 to be used, there are times when a landlord has no choice but to take action and evict tenants from a property. Until we have greater clarity on the changes planned for Section 8, today’s news will only increase pressure on the sector and discourage new landlords from investing in buy-to-let properties.

This comes at a time when demand is dramatically outpacing supply and rent costs are rising.”

Tom Gatzen, Co-founder of ideal flatmate, said: “Today’s news will bring a greater degree of security and stability to thousands of tenants across the nation and will ensure that any termination of a rental agreement is done fairly and with enough forewarning to enable alternative arrangements to be made.

As a nation, we rely so heavily upon the rental sector and as this need evolves so must the way we govern it. Ultimately we want to achieve a harmonious space that not only remains profitable for UK landlords but enables tenants to secure a property quickly and cost-effectively.

Of course, for those that don’t abide by the rules there must be consequences and while today’s news will help rebalance the landlord-tenant scales, it’s important that this doesn’t swing too far the other way.”

Calum Brannan, founder and CEO of Howsy, commented: “Any evolution of the UK rental market that benefits both tenant and landlord is a positive one but while we look to make it a more secure space for tenants, we also need to make sure these changes aren’t to the detriment of the landlord.

We’ve seen the impact caused by the Government through previous knee jerk policy implementations against the buy-to-let sector and the resulting reduction in rental stock actually entering the market as a result.

While this latest move has been made with the best intentions, it’s vital that the landlords themselves are also safeguarded so that we don’t further exacerbate this exodus of rental property providers. By removing their existing route to quickly evict genuinely poor tenants, we could well be doing so.”

Rhodri Pazzi-Axworthy, partner at European law firm, Fieldfisher, said: "This move is frankly unnecessary, as assured shorthold tenancies (ASTs) already provide for longer terms than six or 12 months.

The main restraint in individual the private rental sector (PRS) is in fact mortgage terms, which often limit lettings to 12 months. Regarding the revised 'bad tenant charter', the only real change is the right to termination at will at the end of a tenancy, or after two months if the tenancy is a rolling one.

The landlord's right to recover their property for their own use or on sale is still protected. So, although landlords will still be able to recover properties from bad tenants, this will require eviction proceedings, which will put more pressure on courts and cost more. Private individual landlords will steer clear of high-risk tenants – such as those on low pay or the elderly – leaving the problem with social landlords and affordable housing providers.

This will inevitably lead to an increase in rents in these sectors, as landlords will effectively seek to socialise the lost costs of the eviction process."

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