Could a Section 21 ban trigger a landlord exodus?

May 14, 2019
Eviction notice- Section 21

Could the recent government decision to abolish Section 21 – the notice a landlord must give to a tenant to begin the process to take back possession of a property – trigger an exodus of landlords from the market?

A new poll by the National Landlord Association appears to suggest it could, with the body saying, decreasing the rights of landlords is putting further pressure on a sector already feeling the strain of tax and legislative changes.

The research found that 11% of landlords had been forced to use Section 21 in the past five years to evict tenants, with 7% resorting to using section 8 to terminate a tenancy, a far trickier process.

With a tenth of landlords reliant on Section 21 according to the data, the NLA have launched a national postcard campaign in a bid to inform the public and the government of what they consider to be the negative impact of this latest move.

They argue that landlords continue to feel victimized in the face of a sector shake-up that has seen tax changes and tighter regulation.  If landlords lose even more confidence in the market, the NLA argue, tenants could feel the impact most as lack of stock and high demand will lead to higher rents.

The changes are already being to bite. A recent report by the Residential Landlords Association (RLA), found that just over 25% of landlords in the private rented sector are planning on selling at least one of their properties by the end of the year.

Government data found that 18% of landlords –  that’s 10% of all UK tenancies – are planning to reduce the number of homes they own.

To compound the problem, 23% of landlords have reported a significant increase in the demand for property.

David Smith, RLA policy director, commented: “All the talk of longer tenancies will mean nothing if the homes to rent on not there in the first place.

“The Government’s tax increases on the sector are already making it difficult for tenants to find a place to live, with many landlords not renewing tenancies. If rushed and not thought through, planned changes to the way landlords can repossess properties risk making the situation even worse.

“Action is needed to stimulate supply with pro-growth taxation and a process for repossessing homes that is fair to all.”