Landlord Concerns Over Section 21

Landlord concerns over section 21

Why Are Landlords Concerned About Section 21?

Back in April the government announced plans to change the use of section 21, with the primary goal of ending the small number of unfair, no-faul and revenge evictions observed in the industry.

This will also bring in the end of assured shorthold tenancies (ASTs), which will in turn mean that assured tenancies become the norm.


Section 21 allows landlords to give a minimum of 2 months notice to tenants on a AST contract to vacate the property, without a valid reason.

The private rental sector (PRS) had controversial feelings to the proposed changes to section 21.

Under the proposed changes, landlords will have to provide strong, concrete evidence to satisfy a judge for reason to evict a tennant.

It is not only landlords who will feel the disruption of an abolition of section 21; tenants on housing benefits and universal credits will also be disadvantaged – the individuals who the abolition of section 21 aims to protect.

How Has The Industry Responded to The Section 21 Proposals?

The NLA recently released a report discussing the unintended consiquences if section 21 changes were implemented.

In short, based on a survey conducted by the National Landlords Association, in the worst case scenario, there are estimated to be around 960,000 fewer properties available for rent, 770,000 fewer properties available to tenants on benefits or housing credits and 600,000 tenants could face a rent increase.

This is, in part due to the immense strain that the PRS has been under in recent times;

With the tenant fees act, mortgage interest relief changes, stamp duty hikes, it is increasingly difficult for landlords to remain profitable.

Landlord Concerns

One of the main concerns landlords have over the changes to section 21 is the cost and time elements which will occur as a result of taking court action to evict a tennant.

However, government have addressed these concerns by stating a section 8 would receive expidited court action to speed up the process.

The second substantial concern landlords have is that it will be far more difficult to evict tenants which are causing a headaches such as late rent payments and evasive behaviour.

In 2018, 47% of landlords have faced problems when regaining reposession of their property, costing on average between £1000 and £5000 in loss of rent and legal fees – and it should be noted that this is before the abolition of section 21.

From the NLAs findings, landlords have responded by stating their most likely way forward is to become more selective over their choice of tenants. This is obviously not good news for those who are on housing benefits or lower income brackets.

Breaking these results down into portfolio size, landlords with small portfolios are more likely to choose to leave the private rented sector (20 percent of landlords with one property, 12 percent of landlords with five or more properties). However, landlords with larger portfolios are, unsurprisingly, more likely to consider reducing the size of their existing portfolio (14 percent of landlords with five or more properties).

To summarize the findings from the NLAs survey, the table below shows the responses from Landlords if a) A complete removal of section 21 were to occur and b) A reformed court process for evicting tenants.

|Removal of section 21|Reformed court process| |--|--| |Private rented dwelling stock to reduce by 20% (960,000 dwellings)|Private rented dwelling stock to reduce between 4-8% (180,000-390,000 dwellings)| |59% decrease in property available to individuals on housing benefits or universal credits (770,000 dwellings)|10-23% decrease in property available to individuals on housing benefits or universal credits (130,000-300,000 dwellings)| |600,000 properties to receive rent increases|110,000-240,000 properties to receive rent increases|

Points to Takeaway

  • It is likely that the government will proceed with the abolition of section 21

  • Assured shorthold tenancies will no longer be used

  • Landlords have displayed their concerns over the proposed changes through the NLA survey

  • Main concerns are that it will be too costly and time consuming to evict nuisance tenants – many landlords stating they may leave the industry alltogether or become far more cautious with who they accept as a tenant

  • Government are proposing a potential reformed court process to allow for quicker turnaround of evictions to minimize losses for landlords

  • Not only will the removal of section 21 harm the PRS, but also tenants on housing benefits and universal credits

  • If the changes are brought into affect, the government must realize the importance of the private rental sector to the economy – recent policy changes have already squeezed the PRS hard enough

A final word from the report from the NLA:

The Government should recognise the significant cost of repossession to landlords and seek to minimise this where possible. This could include considering the value of introducing a tribunal system for all housing cases, as in Scotland. It is free for landlords and tenants to access the tribunal, and the use of a tribunal reduces the need for paid legal representation.

Read the full section 21 report from the NLA.


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