Having looked at one of the justifications for the reform I want to turn to the other, possibly, more justifiable reason for abolishing section 21. Is the fact that the Government believe that when it comes to the end of the fixed term of an AST, landlords use this leverage to effectively hold tenants to ransom by telling the tenant’s that if they do not accept the rent increase they will be out!!
Please do not get me wrong, I do not agree with any landlord that uses this position in this manner, however, I would argue that this scenario is as unlikely as it is unacceptable. Yes of course there will be some landlords that abuse this position but in the leading most landlords that have a good tenant will resist increasing the rent, even when they really should because they are happy with their tenant and don’t want to lose them.
I have no doubt that any Government official (if any are) reading this will think I am talking rubbish but the majority of landlord’s I act for have been letting the property at the same rate for the whole of the occupation of the tenant only increasing the rent when the property is relet. I appreciate that the Government won’t have just made this up so will be basing it on something. Still, I wonder whether, when they looked into this, they actually looked into whether the rent increase was actually fair and reasonable? Had these tenants been subject to reviews before? How long had their rent remained the same? I haven’t seen any data that they are relying on dealing with these points. So what are they basing it on? Is it because the tenant, who has a vested interest in the rent and wants to keep it low, advises them that the rent increase was unfair? Someone asked to pay more money thinks it’s unfair – someone holds the press!
More worryingly though I don’t think the Governments measures actually achieve the intention. As I said in the last blog, we could be coming up to a rent ‘Perfect Storm’ with rents increasing like never before. If this is the case, tenants won’t need to worry about whether they will be able to afford the rent after a rent review because they won’t be able to afford the rent before the rent review either!
Of course I appreciate that there are some rogue landlords out there who will squeeze every penny and more out of their tenants but, as I have said before, are these the type of landlord that will use section 21 to end a tenancy? I very much doubt it.