The myths surrounding Section 21
Article Posted - 14th May 2019
The buy-to-let world has been thrown into confusion as landlords worry about what rights they will have following the Government's shocking announcement that they intend to abolish Section 21.
Section 21 (S21) of the Housing Act 1988, otherwise known as a ‘no fault' eviction, allows landlords to repossess a property without needing to give a reason to the tenant or the courts. S21 was intended to be used when landlords want to sell. But our data shows S21 is now commonly used in the place of Section 8, which many landlords have found to be costly and ineffective to rectify issues where the tenant is at fault.
While many people presume landlords dish out S21s frequently and indiscriminately, there are a number of procedures landlords must follow to ensure the process is carried out correctly. Because landlords don't need to provide a reason, their tenants often assume there isn't one, or mistakenly believe that the notice has been served for malicious reasons, which leads to unfair backlash against landlords.
Too often we see landlords scapegoated for the wider issues in the housing market, such as the lack of housing supply. The proposed abolition of S21 is yet another example of this.
Below, we attempt to myth-bust some of the most common misconceptions around S21.
Myth: Landlords issue S21 eviction notices on a whim
Fact: No landlord would end a tenancy without good reason. The potential of a void period, even when there is high tenant demand, is not an appealing thought. If the testimonies of our members on this issue are anything to go by, implementing the use of S21 really is a last resort when all other avenues of rectifying an issue with a tenant have been exhausted. Furthermore, according to the Government's English Housing Survey* results, 90 percent of tenancies are ended by the tenant, not the landlord.
* English Housing Survey 2017 to 2018: headline report
Myth: Landlords evict tenants using Section 21 as ‘revenge' if the tenant makes a complaint
Fact: If a tenant complains to their landlord in writing and the landlord issues a section 21 instead of responding to or rectifying the problem, the tenant can make a complaint to the council. If the council is satisfied that the issues make the property unfit for human habitation, the section 21 issued becomes void and the landlord cannot use section 21 for at least six months after this time.
Under the Homes (Fitness for Human Habitation) Act 2018, which came into effect earlier this year, tenants are now able to take their landlord to court to challenge the state of the property. Landlords can be charged civil penalties of up to £30,000 for the worst housing offences.
Myth: Section 21 is the leading cause of homelessness
Fact: This lazy claim is commonly used as to demonise landlords in the media. Section 21 however is not a cause of homelessness, rather a symptom of a much larger problem. Low wages, insecure jobs, the frozen LHA rate, and problems with Universal Credit cause tenants to get into rent arrears, which in turn is the leading reason for landlords to use Section 21 as they are unable to sustain tenancies. It is simplistic to blame the process, as removing S21 will not remove landlords' ability to gain possession where the tenant is in arrears.
It is also worth noting that local authority homelessness units advise tenants to ignore Section 21 possession notices and to wait to be evicted by the courts so that they will not be considered ‘intentionally homeless'. This is a huge problem as it damages the confidence of landlords who provide homes to those who aren't able to access social housing. It also creates unnecessary strain on tenants, landlords, and the Courts Service.
Myth: Landlords issue a Section 21 when a tenant cannot afford the rent increase
Fact: As with all Assured Shorthold Tenancies (ASTs), landlords can increase the rent after the initial fixed period, if it is stated in the tenancy agreement or if the tenant agrees to the increase. However, if the agreement has no provisions for the landlord to increase the rent, they must either: a) renew the contract at the end of the fixed term but at an increased rent, or b) serve a Section 13 Notice proposing an increase in the rent at the end of the fixed term.
Like any sector, the PRS has some bad apples, but the majority of landlords do not abuse their power, and value tenants who pay rent regularly and look after the property. Our survey with YouGov showed just 5 percent of those landlords who had sought possession did so because they wanted to increase the rent.
While the risk of repossession is a concern to tenants, ultimately the anxiety of flexible renting is far outweighed by the benefits. Tenants are easily able to give notice to vacate, reducing their commitment. If a new job requires a change in location, renting makes this easy, and students can rent in city centres for their period of study. Property sharing also reduces the cost per person allowing tenants to live in an area they may have thought out of their budget.
Given the difficulty for first-time buyers to get their step on the ladder, and without a firm commitment to social housing generally, landlords provide an invaluable service -something that should not be forgotten.
The NLA is opposed to the abolition of Section 21.
To highlight the short-sightedness of this policy to Government, we're launching a postcard campaign to tell the Prime Minister directly the impact this will have on the market. Please click on the link below to join the campaign.
Please share this campaign to help #saveSection21.
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