Section 21 changes: what’s the problem?

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On 16 April this blog flagged up government plans to scrap “no-fault” evictions. The change proposed to the Housing Act 1988 means landlords will always need to give tenants a reason for ending a tenancy, such as breach of contract or wanting to sell the property. We also drew attention to the fact that the government needs to show caution if this decision, by putting tenants’ interests first, is not to have unforeseen consequences.

In fact, the results of scrapping Section 21 are not ‘unforeseen’ at all. If the proposed change is not carefully thought through and properly managed, we predict smaller landlords leaving the rental market in favour of less troublesome investments, shrinking the available rental stock as a result.

So why has the government chosen not to introduce three- year tenancies but now seeks to introduce never-ending agreements or contracts that can only end using protracted court eviction processes and proving fault? Many landlords feel more secure in renting their properties knowing that they can get to know their tenants during the first year of their tenancy and have a straightforward way out using Section 21 (a non-adversarial, no-fault process) should any kind of nuisance, behaviour or problem with late payment start to rear its head.  Housing Associations also use a one year contract before they grant long term tenancies for the very same reasons. 

Richard Lambert urges the government to look to Scotland, which scrapped no fault evictions in 2017.

The National Landlord’s Association (NLA) has been quick to slam the proposal, arguing that Section 21 “has become a backstop to overcome the ineffective Section 8 process”. Richard Lambert, CEO of the NLA, talking to Landlord Today earlier this month, said: “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”.

Lambert suggests that before making any major decisions, the government should look to Scotland, which outlawed Section 33 notices (equivalent to Section 21) in December 2017. Scottish landlords were just as resistant to the change as their English counterparts but the predictions of disaster have not materialised, probably due in large part to the fact that the court process was reformed in advance of the Section 33 changes. With Wales also expected to following Scotland’s lead, it is vital that the law makers tread carefully. As Richard Lambert says:  “If the government introduces yet another piece of badly thought-out legislation, we guarantee there will be chaos.” We wholeheartedly agree with that.

Tomorrow’s blog will take a closer look at what could be done to make any new proposals work for tenants AND landlords.