An industry body that includes many of the major estate agencies in the UK has taken the Government to task over its plans to abolish the Section 21 evictions process.
The Lettings Industry Council, which includes representatives from a range of industry stakeholders including Savills, Knight Frank, Dexters, Belvoir, Martin & Co and many others, says in its response to the Queen’s speech proposals on the private rented sector that, unless mitigating measures are put in place, even more landlords will leave the sector, to the detriment of tenants.
The report takes apart the Government’s Shelter-inspired argument that ‘no fault’ Section 21 notice evictions enable landlords and agents to recklessly evict tenants on a whim, pointing out that any sensible landlord wants paying and responsible tenants to stay, not go.
“Rental properties are investments and landlords prefer to have an occupied property rather than risk a void period, with statistics showing that the majority of tenancies are ended by the tenant, not the landlord,” the reports says.
“However, we accept that the Government have committed to do this and we have to come together as an industry to find the best way of introducing this far-reaching change and avoid unintended consequences.”
TLIC says there will be other ramifications, it says, including that abolishing Section 21 evictions effectively “abolishes Assured Shorthold Tenancies (ASTs) and that, apart from losing landlord confidence, which is a serious concern, it will change the entire working model of an AST for all concerned”.
“For tenants, this will mean that landlords become more risk-averse and that those with lower incomes and poor rental history will be rejected in favour of higher-income renters with a satisfactory rental history,” the report adds.
Given that Ministers are determined to plough on despite industry warnings, TLIC recommends that to help landlords deal with Section 21 being abolished, several actions should be taken.
These include speeding up possessions in the courts, clearing the ongoing backlog, prioritising cases involving persistent and repeat rent arrears cases and making mediation either mandatory or recommended in all cases.
The report also recommends other initiatives including a deposit bond scheme for financially vulnerable tenants, an industry-wide regulator to oversee both letting agent regulation, property MOTs, a property register, both tenant and landlord redress, and also the widespread use of Property Reference Numbers or UPRNs
“This report seeks to find a balance between encouraging investment in the sector to increase available homes and ensure they are of consistent good quality through natural supply and demand competition,” says Theresa Wallace, Chair of TLIC (pictured).
“The Renter’s Reform Bill provides a once in a generation opportunity to improve the lives of renters.
“However, in order to achieve maximum impact and create true strategic change, we believe it is crucial to phase in these significant changes in a considered manner over a period of time, avoiding unexpected unintended consequences which only hurt those we are seeking to protect the most – tenants.”