Why retain Section 21?

At Ringley we feel that scrapping this system is not good for landlords or, ultimately, for tenants. Here’s why:

1) Section 21 has been arouind for some time and it works. The system is known by landlords and by tenants, as it has been in place since the Housing Act 1988 was enacted.

2) Many landlords find it cheaper and more efficient in using Section 21 to get their property back. This is rather than using a Section 8 eviction or breach action. The Section 8 method is extremely adversarial. Tenants served with a Section 8 notice (which is not always for for rent arrears) invariably stop paying their rent. Because these Section 8 procedures are conforntational, the landlord often ends up with costs in the thousands and with huge void risk. Added to this, cases sit backed up waiting for court dates for months.

3) There are already provisions to stop incorrect Section 21 use by landlords. Before a landlord can serve a Section 21 Notice on tenancies entered into since 2015, they must comply with certain legal requirements. This, as an example, includes the provision of:

• An Energy Performance Certificate
• The How to Rent Guide
• Prescribed Information on deposit protection (the landlord having also protected that deposit)

4) Under the terms of the Housing Act 1988, a landlord who is worried that they might need their property back is able to protect thenmselves if, not later than the start of the tenancy, the landlord gave the tenant that possession notice in writing that the property might be recovered on the basis of Ground 1 specified in Schedule 2 of the 1988 Act. Alternatively, if the court is of the opinion that it is just and equitable that the requirement of notice may be dispensed with because:

(a) at some time before the tenancy commenced, the landlord seeking possession or, in the case of joint landlords seeking possession, at least 1 of them occupied the dwelling as their principal home; or

(b) the landlord seeking possession or, in the case of joint landlords seeking possession, at least 1 of them requires the dwelling as his or his spouse’s only principal home and neither the landlord (or, in the case of joint landlords, any 1 of them) nor any other person who gave the notice mentioned above, acquired the reversion on the tenancy for a financial consideration.

Does Section 21 lead to homelessness?

The Government claims that landlords’ use of Section 21 eviction notices is the leading cause of homelessness in the UK.

The National Landlords Association (NLA) has completely rejected this notion. Out of 33,020 households assessed by local authorities between October and December 2018, the NLA has pointed out that just 3,890 (11.8%) faced homelessness due to them being served with a Section 21 notice. We are of the opinion that the proposals will deliver a whole range of unintended consequences, including a lower supply of private rented housing due to there being more risk-averse landlords.

Section 21 and the supply of properties

For various reasons. landlords are now exiting the market at a faster rate. It can be seen that this is damaging the existing fragile supply of properties, especially in the areas where they are desperately needed. Tenants on Universal Credit, benefits and/or with a bad credit record/CCJs will lose out.

Added to this, the removal of Section 21 will render more landlords more susceptible to rogue tenants. These tenants bring endless heartache and cost landlords an awful lot of money. Landlords have to be able to evict bad tenants. If it become too difficult to do so, we will very probably require new legislation to encourage landlords into the rental market as we did all the way back in 1988.

The institutions are coming into the market, especially in the Build to Rent Sector, and may cover the main towns and cities. A healthy market, however, requires a range of accommodation types. By trying to push buy-to-let landlords out of the market the supply of properties could plummet. We urgently need our rental market to work for everyone. Scrapping Section 21 isn’t the way forward.