Could Fewer Rental Properties be the Price of Positive Action for Tenants?

Now in its second reading in the House of Lords, the legislation aims to curb unfair evictions, but concerns are growing that it could unintentionally shrink the rental market.

Also known as ‘no fault evictions’, the Section 21 procedure – named after the relevant section of the Housing Act 1988 – currently allows landlords to regain possession of their properties without having to provide a reason. It is often used in cases where tenants fail to pay rent instead of lengthy court proceedings, or when landlords need to sell a property or to move in themselves.  But it is also seen as a loophole for a minority of unscrupulous landlords who make use of it for ‘no reason’ evictions, such as in retaliation for complaints about property conditions or to pressure tenants into accepting rent increases.

Under the new system, landlords will first have to prove they have valid grounds for eviction against certain specific legal grounds, such as rent arrears, anti-social behaviour, selling or occupying the property themselves, or a significant breach of the terms of the tenancy agreement.  The different grounds have varying notice periods, ranging up to four months.

With county courts already under significant pressure, and delays in hearings and bailiff appointments stretching for months, proving grounds for eviction is expected to increase the volume of contested cases, further slowing down an already overstretched system.

For landlords with mortgages, or those relying on rental income for retirement, these delays could pose serious financial risks.  Faced with the potential of extended legal battles and accumulating rent arrears, the predictions are that many small-scale private landlords will be forced to reconsider their position in the rental market.

If more private landlords sell up and reduce the number of rental properties available, it could drive up rents and result in bad news for tenants.

Mullis & Peake is not responsible for external links.