City Residential managing director Alan Bevan said the proposed abolition of the section 21 notices was part of the ‘relentless attack’ on landlords. Tony McDonough reports
Government plans to abolish ‘no fault’ evictions of tenants will lead to fewer rental homes and higher rents, a leading Merseyside residential expert claims.
In his quarterly update on the local sector, City Residential managing director Alan Bevan said the proposed abolition of the section 21 notices was part of the “relentless attack” on landlords that was deterring new entrants into the market.
Following their victory in the General Election, the Tories said they were pushing on with plans to transform the residential sector. Among the proposals in the Renters’ Reform Bill was the abolition of the section 21 rule, dating back to the 1988 Housing Act. It allows a minimum two months notice served on an assured shorthold tenant when the landlord wants the property back.
No reason has to be given for the eviction and is it sometimes used by landlords to evict tenants who are in rent arrears as it is simpler than taking them to court. The Government says the legislation will also includes a simplification of the court process for landlords.
However, Mr Bevan said: “Abolishing Section 21 notices could have a huge effect on the lettings market by not allowing landlords to evict tenants without a valid reason.
“While we agree that more protection may be required for tenants – particularly from unscrupulous landlords – the abolition of section 21’s will further erode landlord confidence in the sector and drive more landlords out of the market thereby reducing supply.
“While the Government has promised to offer landlords more protection from bad tenants, via a reformed section 8 legislation, we await the detail and how this will work.”
He described proposals for so-called lifetime deposits as “interesting” but said it was not yet clear how this would work. He added: “The relentless attack on landlords in respect of tax, legislation and regulation will continue to erode confidence in the sector.
“This will logically encourage both existing landlords to leave the market and new landlords not to enter. This will produce a profound and meaningful reduction in supply at a time when demand continues to rise.
“This can only result in increasing rents unless there is a substantial increase in build-to-rent projects over the coming five to 10 years. On a positive note the benefits of an increasing number of landlords selling up and fewer landlords buying stock is that there is a greater choice of property for owner occupiers to purchase in the city.
“A high percentage of former rental stock that is being sold is at the lower/middle end of the market and therefore at price levels that is attractive to first time buyers.”