Section 21 abolition: considering the implications
A few weeks ago, when the proposed abolition of no-fault evictions was announced, we speculated that, should the move go ahead, many private landlords would quit the sector. Now surveys we have been conducting – amongst landlords on our database and those attending landlord shows – have shown us the scale of the potential exodus.
Around 4 in 10 are seriously considering whether to remain in the sector. Most respondents had a strong view on the issue, and although few believe we can counter the proposal, they are keeping a close and worried eye on the details of the situation.
A key issue is that there is little trust in the Government’s proposed safeguards for landlords who have legitimate reasons for wanting to regain possession. This isn’t helped when ministers routinely talk about it taking only a couple of months to evict a tenant. The reality – even when the legal processes are handled as efficiently as possible – is that it can easily take twice as long.
At the heart of the problem is a system that fails to protect the interests of good landlords from dodgy tenants and good tenants from dodgy landlords. Although something needs to be done to fix this, getting rid of Section 21 isn’t the answer.
We have a housing sector that depends upon an army of small landlords who have invested to give themselves an income and a pension. In most cases, they’re diligent, responsible and fair and have no desire to evict tenants on a whim. Section 21 is a backstop, a safety net, their guarantee that their investment remains something they can control. Without a reliable way of ensuring that – and current court procedures aren’t instilling any confidence – it’s easy to see that many will choose to sell up. On top of everything else, this extra risk is the straw that could break the camel’s back.
No doubt some landlords abuse the current S21 provision. Sadly, there will always be cases where tenants are treated unfairly, and these must be recognised. But as usual, the majority is being tarred by the actions of a few. And what’s happening now – this constant erosion of the rights of landlords – is not in response to mainstream practice. It’s in response to those who should, in truth, be prohibited from being landlords.
We see these reactions time and again from our politicians. There’s an outcry from a minority and the freedoms and rights of everyone are compromised as a result. Housing is an emotive issue and any move that looks like it serves the needs of most people will initially be popular with the electorate. But when you start to dig deeper, you realise that this change may not benefit those it should. Good tenants are likely to find their rents increasing as landlords seek a little extra compensation for their increased risk. In addition, those with a less than perfect profile or credit score will find it harder than ever to find a place to live – and may have to fall back upon the offerings of our sector’s worst rogue landlords.
If the figures from our surveys are correct, the implications are huge. A relatively small proportion of cases will reshape the sector, and possibly not for the better.