Abolishing the use of Section 21 notices to evict tenants would lead to a dearth of private rental properties across the UK, a new economic analysis report shows.
The report by Capital Economics on behalf of the National Landlords Association (NLA) forecasts that there will be a 20% drop in the number of properties available to rent if the most common route private landlords can take to regain possession of their property under the Housing Act 1988 is scrapped.
The report, ‘A new deal for renters? The unintended consequences of abolishing Section 21’, also predicts that a 59% reduction in housing available to tenants on housing benefit or Universal Credit, and a potential increase in rents for 13% of properties.
The report, which you can read here, also suggested a possible solution, a reformed court process that made dealing with Section 8 cases faster and cheaper could nullify the removal of Section 21 for many landlords.
But even under the proposed change, the PRS would still see a likely reduction of between 180,000-390,000 homes, between 130,000-300,000 fewer homes available to benefit claimants, and rent increases for between 110,000-240,000 properties.
Chris Norris, director of policy and practice at the NLA, said: “The government has clearly failed to recognise the realities of the private rented sector by proposing the abolition of Section 21.
“Any government which thinks it appropriate to risk the loss of nearly 1 million rental homes at a time of housing crisis needs to reassess its priorities as a matter of urgency.
“Rather than playing to the gallery, the government should be looking to support and incentivise good landlords to remain active and provide homes to those who need them, rather than making it harder and causing these landlords to exit the market.”