What’s the alternative to Section 21?

The second reading of the Renters (Reform) Bill this week saw the government kick the idea of banning Section 21 evictions into the long grass of “the justice system needs to be fit for purpose”… it’s an indefinite delay that will mean more families will experience homelessness. 

As an organisation that works with landlords, and as a landlord ourselves, we know that there needs to be protection for landlords who want to safeguard their livelihood and their property. As an organisation that works to support tenants, we know there needs to be protection from arbitrary eviction.  

The protections for both landlords and tenants – note I didn’t say “both sides”; there’s often an unhelpful tone that this is some sort of adversarial battle – sit in strengthening Section 8 “reasonable circumstances” but there is nuance in how these will be enforced and how that could be used to disadvantage good landlords and good tenants. 

“Section 21 is used on a whim by unscrupulous landlords who don’t care about the tenant, they just want them gone”

For example, how will “ground to sell the property” be enforced? The first part is fairly simple: after the first six months of a tenancy the landlord is able to end a tenancy because they plan to sell the home.

What evidence needs to be collected to ensure that a sale is genuine, how long will a home need to be on the market as an asset before a change of mind can be made? What is the redress of a tenant who may know that the home has not been sold and cycled back into the rental market, and what protections are there for landlords who have made a financial decision not to sell, but to return to the PRS? 

The bolstering of the guidance around evictions where arrears, breaches and anti-social behaviour are present is welcomed as it gives landlords confidence that they can – under these circumstances – end a tenancy, as long as the current backlog of pending court actions is cleared. 

There are clear roadmaps, particularly when it comes to persistent arrears. The current system can be exploited by tenants and landlords – tenants with serious arrears can pay them off before appearing in court, and each time it happens, a new notice is required.

Landlords can also pounce on tenants experiencing short-term financial difficulty: they may be between jobs, have an unexpected bill or have issues with their benefits. They can be evicted under the current system and fall into homelessness. 

The new grounds are designed to protect those in financial hardship, removing the late benefit payment issue, and giving mandatory grounds if there have been serious arrears of two months’ rent, three times or more in three years. However, given the frailties in employment in the UK, this is still no guarantee that otherwise stable tenants experiencing sporadic financial hardship won’t be affected.

“As an organisation that works with landlords, and as a landlord ourselves, we know that there needs to be protection for landlords who want to safeguard their livelihood and their property”

It feels more robust, but working in the affordable housing sector we know that there are landlords who may not have the cash reserves to cope with three instances of serious arrears before gaining possession. Mortgage and other costs are increasing for landlords the same way they are for owner-occupiers, and we need smaller socially responsible landlords to feel confident about providing homes. 

These are just examples of some of the new statutory grounds and the effects these may have on both landlord and tenant. There needs to be a pragmatic approach to ensure good landlords aren’t punished, and good tenants aren’t disadvantaged. 

The main issue is that a delay in banning Section 21 will have a more practical immediate knock-on. There is an increased and immediate risk that landlords who are concerned about the uncertainty and the implications for them, or landlords who are confused by what is coming, could use the nuclear option now as some sort of pre-emptive strike – resulting in tenants being evicted “just in case”, with the result that more households become homeless in the lead-up to Christmas. 

Section 21 evictions need to end now – we’ve been waiting too long. 

Sue Edmonds, chief executive, Capital Letters