Could Abolishing the current section 21 process actually be suitable for landlords?
Please don’t think that the last two years of solitary confinement have got to me because they haven’t (I don’t think). Still, I have actually got a different view of the potential abolition of the current section 21 notice and its good news for landlords.
As will no doubt be aware, at present if you wished to evict a tenant without any justification you would wait until the fixed term of the Assured Shorthold Tenancy (‘AST’) expired and commence the no-fault section 21 process which simply requires you to give the tenant 2 months notice to vacate and if they do not then you can make an application for a court order to gain possession of the property.
The Government are hoping to abolish the section 21 process in its current so that a tenant who has done no wrong can only be evicted in certain limited circumstances such as the landlord is selling or wishes to move themselves or a family into the house.
End of ‘no fault’ section 21 evictions
The Government give two main reasons for abolishing the ‘no fault’ as (1) it provides tenants more security and peace of mind regarding being able to stay on their property, and (b) it will stop landlord’s being able to increase the rent on a rent review without the tenant disputing it because they are concerned that they will be evicted.
Looking at the proposals with the Governments objectives in mind I feel that the other implications of this decision I going to nullify any possibility that the abolition will achieve these two objectives. If we look at commercial tenancies as an example, the rent payable under a tenancy which has the security of tenure is more than one that does not.
Combine this with the increased demand in the market for rented properties caused by firstly the Government making AST’s more appealing to individuals but also the very real potential that mortgages may become more difficult to obtain in the very near future – what do you really think will be the likely impact on rents under an AST? Unless this increase in demand is going to buck every economic trend ever the rent has to increase. I guess there is an argument that the Government’s proposals will at least achieve their second goal because the majority of the tenants who would not be able to dispute the rental increase wont be able to afford the rent in the first place!
What does this mean for landlords?
I can’t help also wondering whether this issue that the Government are trying to address really is as dire as they believe. I do appreciate that there are some rogue landlords out there and I do feel for those tenants that have to deal with them. But in the main, the professional landlord’s that I deal with, don’t want their property to be vacant and would rather keep a good rent paying, no bother tenant in the property rather than take an increase in the rent.
The only type of landlord that I do think could be adversely impacted by the proposals are the situation landlords eg an individual who has to work abroad for 6 months or so. Depending on how the Government intend to structure the justifications for eviction these situation landlords may feel that allowing the property to be left to a tenant and potentially not being able to evict them is too much of a risk for them to take.
I know that some commentators have stressed concerns about going back to the old Rent Act days which would clearly be devasting to landlord’s but I just cannot see that this is a real prospect. The Government have already said (and they are not known for lying) that they do not intend to interfere with the rent being set by landlord’s which is ironic because that’s exactly what they will be doing by implementing their proposals…just not in the way they envisaged!