Economic analysis shows abolition of Section 21 would devastate PRS
Article Posted - 27th September 2019
- 960,000 fewer dwellings available to renters
- 770,000 fewer dwellings available to tenants on housing benefit or Universal Credit
- 600,000 dwellings could see rent increases.
The private rented sector (PRS) would shrink by 20 percent if Section 21 ‘no-fault' evictions are abolished, according to a new economic analysis report*.
A new deal for renters? The unintended consequences of abolishing Section 21, by Capital Economics on behalf of the National Landlords Association (NLA), also forecasts a 59 percent reduction in housing available to tenants on housing benefit or Universal Credit, and a potential increase in rents for 13 percent of properties.
The report also suggested a possible solution, a reformed court process that made dealing with Section 8 cases faster and cheaper could nullify the removal of Section 21 for many landlords. However, the PRS would still see a likely reduction of between 180,000-390,000 homes, between 130,000-300,000 fewer homes available to benefit claimants, and rent increases for between 110,000-240,000 properties.
In an accompanying report by the NLA, Faultless or fault-based? The realities of the possession processes, case studies of NLA members' experiences with both Section 21 and Section 8 outline the problems many landlords currently face with both processes, including losses in the tens of thousands of pounds.
Chris Norris, Director of Policy and Practice at the NLA, says:
“The Government has clearly failed to recognise the realities of the private rented sector by proposing the abolition of Section 21.
“Any government which thinks it appropriate to risk the loss of nearly 1 million rental homes at a time of housing crisis needs to reassess its priorities as a matter of urgency.
“Rather than playing to the gallery, the Government should be looking to support and incentivise good landlords to remain active and provide homes to those who need them, rather than making it harder and causing these landlords to exit the market.”
The report is available to view here.
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