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Two-year wait possible before Section 21 is banned by new legislation, says ARLA

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Sat 21 Dec 2019

Two-year wait possible before Section 21 is banned by new legislation, says ARLA

The abolition of Section 21 eviction notices could be two years away.

A Government spokesman said a timetable for the new Renters’ Reform Bill will be released “in due course”.

However David Cox, chief executive of ARLA Propertymark, said that implementation could be lengthy as it will require two different government departments – Housing and Justice – to work together.

The Queen’s Speech yesterday outlined a Renters’ Reform Bill abolishing  so-called ‘no fault’ evictions but giving landlords rights to gain possession of their property through the courts “where there is a legitimate need”.

While the proposed Bill will include plans to improve the court process, designed to make it quicker and easier for landlords to get their property back, there is no explicit mention of a Housing Court that many campaigners have called for and the Government itself has previously sought feedback on.

The Renters’ Reform Bill will also give wider access to the rogue landlord and agent database, and create a new ‘lifetime deposit’ for tenants, the document said.

There is also mention of introducing minimum qualifications for the sector by stating the legislation will “professionalise letting agents, to the benefit of tenants and landlords”.

Cox said that the measures could take time, and he cited the tenancy fees ban – first mentioned in the autumn statement of November 2016 but not implemented until June this year.

He also cited the Renting Homes Act in Wales which is still awaiting implementation.

Theresa Wallace, chair of the Lettings Industry Council, told EYE there is too much to do for the reforms to be introduced quickly.

Meanwhile, opposition is mounting to the actual change.

David Smith, policy director for the Residential Landlords Association, told EYE: “We accept the need to protect tenants from abuse but it is crucial that plans to reform the way repossessions can take place are got right if the Government is to avoid a rental housing crisis.

“Unless the new system is fair to good landlords as well as tenants, those same landlords who we need to support simply will not have the confidence to provide the rented homes that are needed to meet the demand.”

Savills warned that the changes may not benefit those it is intended to help.

The agent said: “There are many viable reasons why landlords require their homes back, for example an owner returning for a posting abroad who needs to move back into their home.

“Whatever happens, a complete overhaul of the court system might be a better approach to protecting both landlord and tenant interests.

“The Treasury and Ministry of Justice would need to agree to commit the additional funds to ensure the system works for all parties.  Failure to do so could be to fail to protect the most vulnerable tenants and result in landlords exiting the already stock constrained sector. Any change should be tried and tested robustly.”

But David Alexander, joint managing director of apropos by DJ Alexander in Scotland – where the equivalent of Section 21 was scrapped in 2017 – said the move would create a fairer system for tenants and a faster court process for landlords.

He said: “These legislative proposals should be viewed as positive in changing a property market which has been operating under out-dated and inappropriate laws which don’t reflect the current position.

“There is some scaremongering going on about a dramatic drop in the number of properties if Section 21 is abolished.

“I think that is a serious mistake. Some landlords won’t adapt and consequently will leave the market.

“But make no mistake, fairer rights and greater security for tenants is the future for the lettings sector.”

Separately, in the sales market, a consultation is to be launched on First Homes, a scheme discounting new-build properties for local people and key workers by 30%.

The announcement mentions securing the discount through a covenant, meaning the properties could be reduced in perpetuity.

Under the scheme, the Ministry of Housing, Communities and Local Government said councils will be able to use housing developers’ contributions to discount homes by 30% for people who cannot otherwise afford to buy in their area.

Jeremy Leaf, north London estate agent and a former RICS residential chairman, said local discounts are, in theory, a “very interesting idea” but said the Government would need to address how ‘local’ is defined, and whether it means people who live in an area, or work there, and what would happen if they moved out.

Questions are also being asked about the new ‘lifetime’ deposit and what would happen when tenants left the private rented sector, or were  evicted.