Guest blog by Propoly, a best-in-class pre-tenancy platform designed for letting agents.
Section 21 allows landlords to evict tenants without giving a specific reason if they provide two months’ notice. This is known as a no-fault eviction and is used by landlords to remove tenants who have not broken any rules or breached their tenancy agreement.
Section 21 is a valuable tool for landlords. They use it if they want to sell the property, refurbish or develop it, or if they no longer wish to rent it out. This simple provision of the Housing Act 1988 helps landlords manage their properties effectively and ensures they can provide safe and comfortable homes for their tenants.
However, the proposed abolition of Section 21 would make it much more difficult for landlords to remove those tenants who are causing problems. Landlords would need to use Section 8, which requires them to provide evidence of a specific breach of the tenancy agreement, such as non-payment of rent or damage to the property. This can be a lengthy and expensive process, especially as there’s a significant backlog in the courts. Without the relatively simple fall-back of Section 21, Landlords may not be able to remove problem tenants quickly enough to prevent further damage or loss of income.
Working with LegalforLandlords, we surveyed 22,000 landlords and over 82 per cent of respondents were against the proposed ban. Most landlords feel the abolition of no-fault evictions would be detrimental to their businesses. 7 per cent of landlords have served a Section 21 notice, the most common reason being a desire to sell, refurbish or develop the property.
Within the wider industry, the proposed abolition of Section 21 has been met with mixed reactions, with strong arguments both for and against it. Supporters of the ban argue that it would provide greater security for tenants and prevent unfair evictions. They claim that it would also encourage landlords to maintain their properties to a higher standard, thus avoiding the need to evict existing tenants before refurbishment work.
Opponents, however, argue the ban will make it more difficult to remove problem tenants, and that it would make it harder for landlords to sell their properties or make necessary improvements, factors which could negatively impact the property market. Landlords have expressed concern about the impact on their finances if they are unable to remove tenants who are not paying rent. Landlords might be less willing to invest in rental properties if they feel that they will have less control over them, resulting in a reduction in the supply of rental properties and consequently higher rents.
Critics of the proposal also point to the impact on the court system. Without the quick, easy option of Section 21, landlords will have to rely on the courts more often to resolve disputes. This could place a significant burden on the court system, and longer wait times for resolution.
The changes proposed are intended to help create a fairer market for rental properties, improve housing standards and give greater protection for tenants. However, the unintended consequences may be severe and unduly harsh on landlords. Many are small business owners who rely on rental income to support themselves and their families. The wider property market will also doubtless be affected and rents may be pushed upwards by a reduction in supply.
The abolition, which forms part of the Renters’ Reform Bill could soon be passed into law and the impact of the change on all stakeholders must be considered as a matter of urgency.
