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Section 21: will banning 'no-fault' evictions kill the buy-to-let market? 

Section 21 
Section 21 allows landlords to remove tenants from a property without reason Credit: Thomas Broom for the Telegraph

The Government’s plan to abolish section 21, a law that allows landlords to remove tenants from a property without reason, has caused controversy since its announcement in April.

Landlord pressure groups claim that the supply of homes will shrink and rents will rise if the changes are given the green light. Renters’ unions claim that the increased security will make renting property more attractive and lead to higher quality tenants coming to market.

Plans to simplify evictions under section 8, where the landlord must apply to a court, have also divided opinion.

Telegraph Money asked two of the leading voices in this debate to have their say. David Smith of the Residential Landlords Association and Hannah Slater of Generation Rent, a tenants group, go head-to-head on the section 21 changes.

Will the abolition of section 21 raise costs for landlords and therefore tenants?

David Smith: “It will mean a far greater number of cases being brought to the courts. This can be costly both to the landlord and the tenant.

“Under section 8 landlords can only seek to regain possession of their property after eight weeks of rent arrears. Government data shows that it typically takes over five months between an application to court and a repossession happening. That equates to an average of £4,169 lost, on top of the amount already lost in the eight weeks before this.”

Hannah Slater: “There’s no evidence that making renting more secure for tenants will push up rents. Experience shows that rents are most closely linked to wages and the costs that tenants can bear, rather than landlord costs.

“With tenants’ wallets already at breaking point, it’s unlikely that landlords will be able to extract more in rent. In fact, many landlords will be reassured that tenants are looking after the property better because they feel more secure and can ask for repairs without fear of eviction.”

Will there be fewer rented properties available, or higher screening of tenants, once section 21 is abolished?

DS: “The Government’s own private landlord survey last year found that many landlords are looking to cut their investment in the sector, especially on the back of recent tax rises.

“We can talk about security of tenure all we like, but it means nothing if the homes to rent are not there in the first place. All this does is reduce choice for tenants, and will likely to lead to landlords being less risk averse.”

HS: “But if some landlords sell up because they can’t or won’t offer a secure home, then they either sell to another landlord who will, or to a first-time buyer, directly or via a chain. Either way, supply and demand in the private rental market remains constant.

“Landlords are already cautious about renting to ‘riskier’ tenants, with people on housing benefits struggling to access private rented homes. This is because landlords have no confidence in the Government paying benefits on time and in full, nor in the court system to remove tenants in arrears or breaching their contracts.

"But court reform will happen alongside the removal of section 21 so landlords can swiftly remove tenants in rent arrears, engaging in anti-social behaviour, or breaching their contract.”

Does section 21 have any benefit to tenants?

HS: “Section 21 creates harmful insecurity for tenants and is a leading cause of homelessness. 

"It’s not just the actual eviction that is a problem – tenants’ anxieties about being kicked out of their home at any moment is just as detrimental, particularly to mental health. Tenants fear to ask for repairs in case they are evicted in retaliation.”

DS: “There are positives. In shared houses, section 21 enables anti-social tenants to be removed swiftly. Scrapping it will make it far more difficult to address problem tenants who cause misery for fellow tenants and neighbours alike.

“It should be noted also that powers are already available to councils to prevent landlords using section 21 notices to evict tenants simply for complaining about standards in a property. Sadly they are not being properly enforced."

What reforms must be made to section 8 to ensure it is a suitable replacement for section 21?

HS: “In the new open-ended tenancy, landlords will have to provide legitimate grounds for eviction. The details have yet to be worked out but it’s likely these will include all the current section 8 grounds for eviction where the tenant is at fault, as well repossession grounds for landlords selling up or moving back in.

“In those cases, we would like to see additional protections for renters, such as a notice period longer than two months and a relocation payment from the landlord to the tenant to mitigate the financial impact of an unplanned move.”

DS: “The current section 8 grounds are, at present, an insufficient replacement for section 21.

“Anti-social behaviour is a good example. The current section 8 process requires a level of evidence that makes it all but impossible to prove and evict nightmare tenants."

Should the Government establish a housing court and what powers should it have?

DS: “Yes. The current court system is overly complex. It is difficult to reach court because of funding cuts and takes far too long to adjudicate repossession applications.

“A single, fully funded housing court would better focus not just on possession cases, but a wide range of other matters including problems around property standards.

“Crucially, we would envisage such a court making much better use of mediation to resolve disputes, making them much easier for landlords and tenants to access.”

HS:“Landlords do need more confidence that they can speedily remove tenants at fault, but it’s not clear how a housing court will deliver this. Landlords' main issue with the courts is time delays, but this is due to chronic underfunding of the justice system.

“If a new housing court is not properly resourced it will have all the same issues. Local authority enforcement can be a cost-effective early intervention, but councils need long-term funding commitments from central Government to do so.

“Currently neither landlords nor tenants have much trust in each other and this is a real problem.”

Are you a landlord planning to sell-up following the new tenant eviction law? Or a tenant who welcomes the changes? Tell us your thoughts in the comments below

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