Section 21 repeal – what will it mean for landlords
A house of commons committee recently backed Government plans to repeal section 21 evictions and end fixed term tenancies, albeit with a recommendation for a specialist housing court to help with the impact of the reforms. What are the implications for landlords, tenants, and the housing market in general?
Section 21 v Section 8
A Section 21 eviction is often referred to as a ‘no fault’ eviction as a landlord does not have to provide a reason for the eviction. This is different to a Section 8 notice where a landlord must cite at least one of a list of 17 grounds for eviction. Section 21 notices are usually a more straightforward, quicker, and cheaper option for landlords than a Section 8 notice.
Whilst the removal of Section 21 evictions gives tenants a greater security of tenure, there is concern about the impact of the reforms on landlords and the private rental sector.
Supply and demand in the private rental sector
Many are concerned that removing section 21 evictions will exacerbate rental supply issues. Landlords are already being squeezed by rising mortgage costs, a reduction of tax perks and an increase in tax levies. The concern is that if landlords feel they can no longer remove tenants other than through a lengthy and costly Section 8 eviction, they may exit the market.
A Rightmove survey calculated that demand for rental property has increased by 58% while supply has fallen by 38% since 2019. Additionally, a report commissioned by the NRLA found that a third of private landlords intend to reduce the size of their portfolio in 2023. And of course, fewer rental properties and increased demand will drive up rents, so not good news for tenants.
Additional issues
The government says it will amend the Section 8 regime to compensate for the loss of section 21 but will this further strain on already overloaded courts?
Additionally, half of possession notices are issued because of tenants’ antisocial or criminal behaviour. Research data from the National Residential Landlords Association reports that in over 75% of these cases no assistance has been provided by the police. The removal of section 21 may make it harder to evict troublesome tenants as landlords, particularly where the police have not taken action against them.
Tenant evictions can be complex and must follow a strict legal procedure. Landlords are advised to seek legal advice to ensure any notice is served correctly and legally.
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