By A third of landlords say that the scrapping of Section 21 is of major concern to them according to Mortgages for Business, a specialist buy-to-let broker.
The poll found that 33 per cent of landlords were worried by the reform of Section 21 as part of the Renters Reform Bill.
Under government plans, landlords are set to lose the right to evict tenants at short notice without giving a good reason for doing so.
Until now landlords have been able to use Section 21 of the 1988 Housing Act to evict renters after the end of a fixed term tenancy, with two months’ notice.
Government plans will effectively create open-ended tenancies whereby landlords will have to give a reason for eviction — such as rent arrears or antisocial behaviour — as well as include evidence of the tenant’s shortcomings.
“Fears surrounding the scrapping of Section 21 are a driving force behind landlords not remortgaging and selling-up instead” said Gavin Richardson, the managing director of Mortgages for Business.
In future all tenancies will be assured tenancies that will continue indefinitely unless ended by one of the new Section 8 grounds for possession.
These include: if the landlord wants to sell the property (or move into it) or if there has been a breach of the tenancy by the tenant.
Richardson said landlords had less to fear from reform of Section 21 than they realised.
“Section 21 notices have been abused for years.
They have been used as a vehicle for ‘revenge evictions’, for instance, where renters who have complained about their property are evicted in retaliation.” he said.
“I don’t think the reforms will prove to be that bad.
First, tenants didn’t have to do anything wrong to justify a Section 21 notice — they could have been paying the rent on time and taking good care of the property.
Sensible landlords rarely turf out good tenants who pay their rent as they want them to stick around.
So this reform will disproportionately hit bad landlords abusing Section 21, rather than the reputable end of the market.
“Second, tenancies can still be ended if there has been a breach of the tenancy by the tenant. Furthermore, the government has said it will introduce a new ombudsman to settle disputes between tenants and landlords without the need to go to court — and speed up court processes where possession cases require them.
The government has also promised to digitise the courts’ agenda ahead of these reforms to ensure a swift resolution to these cases.
“Third, owners will be able to end a tenancy if they plan to move back in or sell it — that was the real danger of this reform, anything that inadvertently risked landlords’ ability to realise the value of their housing assets through disposal.”
“The loss of full tax relief on mortgage interest payments for individual landlords, the stamp duty surcharge on additional property property purchases, and the need to ensure properties meet energy efficiency rules expected to apply from 2025 are all far more significant for landlords.
“You’d never guess that from the government rhetoric though.
For instance, I don’t think for a moment that Section 21 exacerbated homelessness as one Tory communities secretary claimed.
The politicians are irresponsibly trying to curry favour with tenants: the country will suffer as the private rented sector — with its efficient use of property stock — dries up.
The government needs to stop trying to gain cheap brownie points by taking a pop at the private rented sector and needlessly spooking landlords.
It is the reason the government has lost the confidence of responsible landlords.”
Mortgages for Business’ research found that the chief concern of landlords was higher mortgage rates (a concern of 63 per cent of landlords) followed by Section 21 reform and EPC regulations and tax (both a concern of 32 per cent of landlords).
Gavin Richardson said:
“Of the big concerns raised by the business people working in this entrepreneurial sector, government is responsible for all of them — from Kwasi Kwarteng’s catastrophic mini-budget smashing up rates to new EPC legislation and the changes to the way the Private Rented sector is taxed.
It’s hard to see how this is the work of the party of business.
The government is making it harder to start and grow a business in the private rented sector.
The UK is not a place where property entrepreneurs know they can build on their ideas and find success.
Landlords’ potential is being restrained.”
The moment abolitision of S21 was announced I stopped, as a small invester, investing in residential property. If there is a good choice or a stupid one the Government’s, in recent years, always chose the latter. These political fools have not learnt from the experience that history teaches with the effects of the Rent Act 1977. It killed the rental market stone dead. Like the historic changes to interest relief that Nigel Lawson stopped in 1988 it stalled the housing market for years. They might as well have gone to “Rent a Clown” to select a Prime Minister – whopps I foget they did!
Now more and more smaller landlords have finally heard the noise of S21 aboilition and there is an exodus from the Rentals market. Chaos has started; tenants are out bidding one another driving the rental rates higher and higher, scarcity of rental property is driving this competition, tenants are finding themsleves stuck in their accommodation or if less fortunate not finding accommodation. The plus side, at present, for landlords is the pool of tenants is ever larger providing a greater pool of tenants to choose from, more well placed tenants available, rents increasing and yields improving. For tenants ony the better placed tenants are able to rent where they have more security at better rents.
So I unwittingly Shelter, Generation Rent, Councils, politicians etc who have driven Government Policy to ensure S21 is abolished currently are responsible for the current housing crisis. They have chosen to ignore the many warnings and predictions like punch drunk fools. They have made their policy based, by enlarge, on the complaints made by bad tenants, unrealiable tenants, and scaming tenants that decent landlords needed to remove using s21. So protect the rubbish and the bad effects are paid for, and felt by, the vast majority of excellent tenants that have no problems with their landlords. It is an effect of woke and lets hope the woke brigade go broke! How can so many politicans be so stupid? A very worrying fact.
I have a rented property becoming vacant . And another likely to be in June There is no way I’D RELET .in 25 years with 8 properties WE have NEVER EVICTED ANY and never had a problem . But I feel tenanted property is too risky to keep with out s 21 and a crumbling court system – a parking case took 6 years to Come to court – we win of course
We are going to holiday let’s two properties in Devon and hop the other two tenants leave of their own accord
There is no doubt that Removal of Section 21 is the biggest obstacle for Private Landlords and caused a massive sell off, also the biggest cause of Homelessness.
All caused by one man Mr Michael Gove why is he still in a job having been previously sacked for double crossing the Prime Minister.
Removal of Section 21 the foundation of all residential lettings before which there wasn’t any, do you not get that you morons.
The real issue here is its a Permanent Eviction Ban do you think we don’t know the difference.
You are of course correct. The view the public get is the spin pushed out by government and so called housing charities that house nobody. Supported by the Bent Broadcasting Companies who never ever tell the whole truth who NEVER tell the true facts that abolition of s21 and other landlord bashing trips the gov are on have massively reduced housing supply which increases rent. Absolute manipulation by the state.