A prominent lawyer says the use of Section 8 eviction powers as envisaged under the Renters Reform Bill could lead to the “significant decline of the private rental sector.”
Gina Peters, Head of Landlord and Tenant at Dutton Gregory Solicitors, says: “The proposed Section 8 grounds on paper give landlords the ability to get their property back, however, any court claim for possession will require a court hearing, without the possibility of just the presentation of paperwork. This could see the whole process take significantly longer - months, rather than weeks.
“The length of the notice for rent arrears is due to increase from two weeks to four, which means a landlord could experience rent not being paid for an even longer period.
“The Civil Procedure Rules currently provide for all possession claims to be listed for hearing within eight weeks, though this was suspended during the pandemic and has never recovered in certain courts. As the court infrastructure currently stands, the system would not be able to cope with the influx of increased numbers of possession hearings, as listing in all courts is at a premium. I fear the inherent delays with Section 8 could bring about the significant decline of the private rental market.”
Peters says that the over-riding fear of Section 8 delays is already triggering a glut of Section 21 evictions ahead of the Renters Reform Bill becoming law.
Dutton Gregory’s Landlord and Tenant department says it is processing “an unprecedented number” of Section 21 notices, which have been issued to tenants since the announcement of the planned reform. The Ministry of Justice also recently reported that no fault evictions were up by 15.8 per cent in the three months to March.
Dutton Gregory puts this down to “fear and uncertainty felt by private landlords.”
A Section 21 notice is currently carried out through the accelerated possession process and does not generally require a hearing to be listed by the courts; as a result of the proposed abolition, the government has said the grounds of Section 8 will now be strengthened, to allow landlords to recover their property.
But the law firm warns: “This hasn’t offered peace of mind to many buy-to-let owners.”
Peters comments: “Our increase in workload hasn’t gone unnoticed, and we feel many private landlords are now suddenly serving Section 21 notices as a safety precaution.
“The current socio-economic situation has seen inflation, mortgages, and interest rates sore, which is having a knock-on effect on housing stock and forcing rental payments to go up.
“This has left many landlords in a tricky position, as they want to retain their property and make a profit, but fear they could potentially go for months without receiving rent if a tenant defaulted. Many would now rather serve a notice – while they still can – with the intention of selling their property and exiting the rental market."
With fewer rental properties available – as a result of private landlords selling up – the demand from tenants will continue to soar, and Peters says this may allow Build to Rent to triumph.
“This will change the rental landscape enormously” she says.
She continues: “The Landlord and Tenant team at Dutton Gregory Solicitors has also seen far fewer private landlords expanding their portfolios this year. Furthermore, some tenants being served a Section 21 notice are not actually able to vacate the property in a timely fashion, due to the lack of affordable alternatives, which continues to put pressure on the courts and increase costs for landlords. Much more needs to be done to help improve the waiting times at court to eradicate lengthy delays and give private landlords an increased sense of security and surety.
“The Renters Reform Bill is expected to come into play at the end of next year at the earliest, but with a General Election anticipated for May 2024, this intended abolition is already skewing the rental market.”
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Only a 16.8% increase????? Is everyone asleep?
I am not sure that their figure regarding Section 21 notices is right either. And is a general election anticipated for May 2024? I haven't heard that. Why would the Tories hold one as early as that?
Agree Ellie and I haven't heard about a GE date too.
The rental Reform Bill would be lost if a GE comes in Spring. Legislation is usually enacted in April and October and with second reading now not til Autumn that’s incredibly tight. Do we hope? Or fear Labours version??
Think those increases only up until March this year. If they include the second quarter too after the first reading I would expect that number to have doubled.
I've just read today's news on the Evening Standard - there are some saying Rishi should opt for spring 2024.
The Guardian is suggesting that it could be May 2024
I had heard November 2024 as a possible date before - the Tories hoping that the economy will be in a better state by then.
The activists received all they wanted in the Renters Reform Bill - and now want more e.g. force landlords to pay tenants compensation - two months rent - if they want to sell or move in etc.
The Conservatives haven't listened to landlords' perspectives at all, and therefore it would be difficult to envisage that any political party could be more one-sided than the Conservatives have been. If the Labour Party were to opt for the Welsh Labour legislation then no fault evictions would still exist - and the private rental sector would not be decimated. However, Lisa Nandy appears to be very left wing in her views and therefore it could be even worse for landlords under Labour - legislation could be in force quickly and it might apply immediately to existing tenants. Could there be an immediate eviction ban under Labour?
Yes why not just roll out eviction bans. It's not the MPs properties. They don't care. They will look like Robin Hood protecting the vulnerable; those with anxiety, panic attacks, ADHD, those with any form of disability (proven or otherwise), those who identify themselves as being a cat/dog/dinosaur/the moon. Any excuse not to pay the rent readily accepted.
Difficult to know what to do at the moment, Nick. Doing nothing might not be the best approach.
It's difficult to say what to do. We all no Labour will be worse. Nandy has has said rent arrears should not mean losing your home - so that's an open invitation to their scrounger voters. Their bill or Charter will be much worse if they get in. I am sure many Tories have jumped all of the RRB now. But why can't they check Gove's homework before it was released? Including not issuing his White Paper. Can the Tories do such a big climb down (as they should)?
They already attempted a move to the right by installing Liz Truss -and that failed because the economic plans were not sustainable. I am not sure that Rishi will remain in office
Ellie
I agree. Doing nothing, not buying or selling, is currently the safest option.
Doing nothing has also been a very successful strategy for many Labour supporters who make a very good living doing it!
Rightly or wrongly the perception among LLs is that the court system is not fir of purpose & once S21 is gone regaining our properties will be a lengthy & time consuming business. Together with the likelihood of high interest rates for the. foreseeable future BTL no longer looks appealing as an investment.
BTR - the proposed saviour of the PRS - may not turn out to be the source of plentiful, affordable housing promised. LLs have tried to engage with the Govt, but they only appear to listen to the tenant groups. So the PRS will fundamentally change. I believe it will be smaller & much more expensive whilst young people & low earners find the door shut firmly in their face. We tried to warn them!
They will never learn, only consequences seem to bring a reaction 🤐
Never truer words Simon. This is the ONLY time they “might” take note!
Correct Simon,
The consequences of RRB has bitten the Government very hard which is why Gove has started to row back on policies. I genuinely think he did not realise the general feeling amongst landlords, listening to activists groups through activists researchers have skewed his view of the real world.
Now a load of landlords have put the signs up they are in real trouble.
Do we think the government is listening? I am not convinced. Perhaps they put the rise of S21s down to S24 and the interest rate rises. Perhaps they feel they have tried to heap too much on at once, and with the rate rises the PRS is now in a dire state and BTR is nowhere near up and running.
I haven't seen anything on lenders' concerns on the RRB. Or the BTR operators haven't been vocal on the RRB.
The courts are a broken system, and has for the people that work in them ? words fail me there
Don't get me started on that one....
The main reason Gove is backtracking on his green agenda is becausr the Tories have realised the only reason they didn't lose all three by-elections is that ULEZ ibtroduced by the labour mayor in Uxbridge is extremely unpopular and cost Labour many votes.
However the introduction of requiring an EPC of C is not the one causing the most unrest and uncertainly amongst landlords. Apart from the totally unfair taxation of landlords, the loss of section 21 when nothing definate has been proposed, never mind implemented about the streamlining or revamp of the current court situation. The legal profession is warning that it is already overloaded, and will certainly not be able to cope with the added workload. I have said before that repealing section 21 before the new system for section 8 is installed and proved to be working is suicidal for landlords.
Get rid of family tenants and focus on groups of students.
It's now the only safe long term rental option. Otherwise full time short term rentals.
Families should be terrified by the loss of Section 21.
Landlords have options. Families don't.
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