"Housing campaigners have put a lot of the industry’s ills on Section 21. I fear they will be disappointed when the reforms come to pass and we don’t see a significant reduction in homelessness"
- Neil Cobbold - PayProp UK
If the Renters (Reform) Bill becomes law, tenants will no longer receive ‘no fault’ eviction notices as Section 21 is due to be abolished, meaning all evictions would take place under a ground specified in Section 8 of the Housing Act 1988.
Politicians and industry figures have warned that this could well lead to an increase in homelessness.
Currently, tenants evicted under Section 21 have the automatic right to assistance from local councils. The government has confirmed that this will not be carried over to Section 8 evictions, saying, “There is no need for the legislation to have a unique requirement around eviction notices”.
Labour’s Angela Rayner, Shadow Secretary of State for Levelling Up, Housing, Communities & Local Government criticised the issue in a recent debate on the Renters (Reform) Bill, saying, “the Bill removes that right to immediate help… [which] could lead to a huge spike in homelessness [that loophole] must be closed.”
Evictions will continue under Section 8
Research from PayProp, an automated rental payment and client accounting specialist, shows that the three most common reasons for lettings professionals issuing a Section 21 notice will also be eviction grounds under the proposed reforms to Section 8.
The company’s recent Renters (Reform) Bill survey report names them as:
- The landlord wants to sell the property
- Rent arrears
- The landlord wants to move themselves or a close family member into the property
As a result, says PayProp UK’s managing director Neil Cobbold, the removal of Section 21 is unlikely to bring about a big reduction in tenant evictions – even if there is court capacity to process all of the evictions now falling to Section 8.
Serious long-term consequences for English tenants
In addition to not being immediately entitled to council help and being put through longer eviction procedures under the court system, tenants evicted for rent arrears under Section 8 will face a more difficult time finding properties than if they were evicted under Section 21.
According to the most recent English Private Landlord survey, “more than four-fifths of landlords (84%) were unwilling to let to tenants with a history of rent arrears.”
Currently, tenants in rent arrears evicted under Section 21 may not have a money order judgment against them to repay the rent, so a future landlord may not know if the tenant has a history of arrears. This will now be a matter of public record.
Stability and court reforms needed
Cobbold (pictured) comments: “Housing campaigners have put a lot of the industry’s ills on Section 21. I fear they will be disappointed when the reforms come to pass and we don’t see a significant reduction in homelessness.
“Our research shows that Section 21 is being used because it was the easiest way of getting the property back for the landlord, but that means that the tenant could move on without the stigma of a court judgment for arrears or antisocial behaviour.
"What’s going to happen after the Renters (Reform) Bill is that those reasons for eviction will be clearly on the tenant’s record. When they look to get a new privately rented property, with supply outstripping demand, the vast majority of English landlords are not going to rent their property to a person with an at-fault eviction on their record.
Cobbold concluded: “Ensuring a stable private rented sector is key. Landlords need confidence that they can continue to invest in the sector and regain possession of their properties efficiently through the courts if needed. If landlords leave en masse, then no amount of rental reform will bring down homelessness.”