How the end of no-faults evictions will impact landlords
Over recent times, the term “no-faults evictions” has become a very contentious one. Those opposed to the concept paint a picture of families being dragged out of their homes by ruthless landlords who want to raise the rent as high as possible regardless of the consequences.
Those in favour point to the fact many landlords resort to “no-faults evictions” even in cases when there is clear fault because the alternatives are more complicated and therefore are both more time-consuming and more expensive.
For the time at least, however, the political pendulum appears to be swinging in favour of banning “no-faults evictions” or Section-21 evictions as they are more correctly known. The question then becomes how the end of no-faults evictions will impact landlords and sadly the answer to that is currently unclear.
Assuming there is no change to the current laws
If Section 21 is revoked with no other change to the current laws, then the only way for landlords to evict tenants would be under Section 8 of the Housing Act.
This allows landlords to repossess a property either under pre-advised grounds or because of a breach of the conditions of the tenancy. There are currently two big problems with this.
Firstly, as has previously been mentioned, the process for Section 8 evictions is both lengthy and expensive. Even if this issue is rectified, there is still a further, significant problem. As currently stands, Section 8 does not allow landlords to evict tenants to sell a property.
At current time, landlords can use Section 21 to empty a property for sale, but if Section 21 is revoked without any further changes then landlords will have to (try to) sell a property with the tenants still in residence. This could potentially be a huge issue since it will basically mean that the landlord can only sell the property to other investors.
Potential ways forward
In fairness, it is highly unlikely that Section 21 will be repealed without Section 8 being amended to allow a landlord to take possession of a property should they wish to sell it.
The government has to realize that to do so would have the potential to stop the private rental market dead in its tracks as no sane investor would buy into an investment knowing that they could potentially be trapped in it against their wishes and no sane lender would advance capital on a property it would be effectively impossible to repossess in the case of borrower default.
The issue lies more in the need to have a straightforward way for landlords to evict problem tenants. In principle, the government could just sharpen up the current system and, basically, make it work, but doing so would require a lot of resources.
Right now, courts in some areas are already struggling to manage their existing case load of Section 8 evictions so it’s hard to see how they could possibly manage if they had to take on what would formerly have been Section 21 evictions as well.
There has been a suggestion of creating a “housing court” to deal with this workload, but, arguably, a more pragmatic suggestion would be to allow evictions to proceed without a court hearing where there is clear evidence of fault.
Indlu are lettings agents in Denton offering a no let, no fee lettings service with a variety of services to choose from.