Principal Thoughts: Weighing up the government’s proposed abolition of section 21
Posted on: 2019-05-10
Welcome to the latest edition of Ashley Wheaton’s ‘Principal Thoughts’. This month, Ashley considers the proposed abolition of England and Wales’s section 21 notice and weighs up the pros and cons of this polarising issue.
There are two sides to every story. This was clear from reading the reaction to the government’s proposal to axe section 21 – legislation which enables landlords in England and Wales to evict tenants with eight weeks’ notice without an obligation for the landlord to divulge their reasons.
If you were to read The Guardian’s coverage, you would assume the proposal was a clearly positive move, protecting tenants’ rights in disputes with landlords. The article focused on the reaction of housing campaigners who hailed the announcement with the newspaper’s chief political correspondent, Jessica Elgot writing that it would mean ‘…landlords would no longer be able to evict tenants from their homes at short notice and without good reason’.
Of course, it’s important that tenants’ rights are protected and that is the overwhelming positive to be gained from scrapping section 21. Speaking to our Business Development Executive, Adrianne Lowe, who has been a tenant in Reading for 16 years, she shares that view.
“For me, the current legislation creates an imbalance between tenant and landlord and section 21 can be used as an excuse by landlords to evict tenants,” Adrianne opined.
“I look at it from a parent’s perspective having rented ever since I had my son, and eight weeks is not a long time to find new accommodation for a family in this situation. There are a lot of families in private rented accommodation and section 21 can have a big impact on society as seen by the reporting on associated homelessness in the country.
“As it stands, it is weighted too far in the landlord’s favour.”
It is hard to argue against that logic. Further interrogation of the history surrounding section 21 paints a picture of legislative changes to the private rental sector seesawing dramatically between being advantageous to tenants over landlords and vice-versa. The well-researched blog about the background to section 21 by landlord lawyer, Tessa Shepperson is critical of its impact.
Anticipating a backlash from landlords to the proposal, Polly Neate, the CEO of housing and homelessness charity, Shelter, wrote an article debunking a few myths about the proposal and claimed landlords should welcome the change.
Equipped with the above information, you couldn’t fail to be convinced by the arguments in the government’s favour, however, it isn’t quite as simple as that.
Proceed with caution
Guardian columnist, Simon Jenkins welcomed the proposal but advised the government not to over-regulate the sector. The article asked the government not to veer too far away from supporting landlords in its efforts to better support tenants as these sharp swings in policy often create an imbalance which adversely affects the market.
A consequence of scrapping section 21 is a greater reliance on section 8 for landlords to remove tenants who break the terms of their agreement. Clearly, section 8 has to be fit-for-purpose to ensure the transition between the two sets of regulation is smooth and this is something landlord and letting expert, Paul Shamplina advised in his opinion piece about the mooted section 21 ban. Section 8 can be used by landlords to go through the courts to regain possession of their property. The concern for landlords is that the courts will be ill-equipped to deal with such cases although the government has said these cases will be expedited to speed up what could become a lengthy process.
I spoke to our Real Estate Tutor, David Hunt about the proposal and he echoed Paul’s views that the landlord market must also be protected. Looking at the proposal from a historical perspective, David said: “Government often devises popular new laws to benefit tenants but there is always a knock-on effect. Rent control came in last century and was popular with the voting public who were paying rent and were happy rent wasn’t increasing.
“This though, resulted in a decline in quality of new property and reduced incentives for landlords to improve accommodation. Scotland introduced similar legislation in December 2017 and, when the data is available, it would be interesting to see what effect it has had. This could prove beneficial to guiding the proposed ban of section 21 in England and Wales.”
Another one of our Real Estate Tutors, Natasha Collins has written about the removal of section 21, concluding that, in effect, nothing has changed except the route by which landlords will have to pursue such cases. Natasha, in fact, argues that the change will lead to increased costs for landlords and further frustration for tenants.
Wait and see
As demonstrated, the verdict on the government’s plans to abolish section 21 isn’t straightforward and there are plenty of voices in the debate. I welcome increased protection for tenants but this must be done in a way which doesn’t destroy the landlord market and, much like the government’s efforts with apprenticeships, our rule-makers need to listen to all parties affected by the change.
History has shown power swing quite dramatically between landlords and tenants after each move by government but it’s time this met somewhere in the middle to ensure both parties are protected moving forward.
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