Major concerns have been voiced by the industry both prior to, and following an announcement made by HM Government relating to the abolition of the Section 21 notice. Despite numerous professional bodies such as ARLA, who said "the impact on the private rented sector cannot be under-estimated".
The Government plan to bring about the change by abolishing the Assured Shorthold Tenancy, which is the default tenancy type in England and has been for many years. These tenancies were brought in for many reasons and many feel as though we're taking a step backwards.
The consultation does go on to state that significant reform is required in the current legal system and section 8process (which may become the only method of eviction). Whilst Landlords can currently give two weeks’ notice to tenants who are in two month rent arrears, the overall process can take months to regain possession of a property and can cost £1,000's in legal fees and lost rent. The section 21 route is often used in lieu of Section 8 notices due to the fact it is generally a faster, cheaper and more reliable method of regaining possession of a property.
Thankfully the consultation does not support rent controls, although some raised concerns that this may be abused in order toforce tenants to leave a property. It was proposed that measure are put in place to prevent such abuse.
Any changes that do come in to force will not be retrospective, and Landlords with existing AST's will still be able to rely upon section 21. Although (as with the Tenant Fees Act, and Minimum Energy Efficiency Standards) I imagine that after a period of 1 to 2 years the change will apply to all existing tenancies.
ARLA Propertymark said:“This is big news for the sector and we cannot under-estimate the impact.
“We cannot accept amendments to the Section 8 eviction process unless all grounds are mandatory and include persistent rent arrears and anti-social behaviour.
“Only after a full impact assessment and conclusions from a pilot should the Government abolish Section21.”
Chris Norris, director of policy and practice at the National Landlords Association, said: “The court system has been in dire need of reform for a long time, so we’re happy to see action on this.
“Any improvements to this system need to be in place, properly funded and fully functional before the Government even contemplates changes to Section 21.
“Landlords have been relying onSection 21 to compensate for the many failings of the Section 8 fault-based process, which has become too costly and time-consuming.
“If the Government want to deliver a fairer, better quality and more affordable private rental market, as they claim, they should try listening to the concerns of landlords, not justcourt the voting renters.”
David Smith, policy director of the Residential Landlords Association, said: “Landlords’ concerns over scrapping Section 21 remain unchanged unless and until a new system is in place that provides the confidence and certainty needed that they can regain possession of their property in legitimate circumstances.”
You can read a copy of the consultation here.
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