In the late spring, the Government announced that they were planning to end no-fault evictions for tenants living in private rented accommodation.
I have had a number of Birmingham City Centre landlords contact me anxious that removing a tenant from their Birmingham City Centre buy-to-let property in the future had possibly become a lot more problematic. Yet, at the launch of the consultation on the changes to the piece of legislation relating to no-fault evictions (called the Section 21 amendments), the Government wanted to assure British landlords that they would be protected by the bolstering of the existing Section 8 legislation. The current Section 8 allows landlords grounds for recovery of their properties for reoccupation of the landlord, non-payment of rent and other legitimate factors.
3,888 Birmingham City Centre landlords are affected by this potential change in the law
Yet, it is comforting for Birmingham City Centre landlords and tenants in the fact that most competent letting agents very rarely have to evict a tenant. In the worst-case scenarios the tenant needs evicting (normally because rent hasn’t been paid) or because the landlord is either selling their buy-to-let investment or moving back into their property. Look at the consultation – it has been indicated that those grounds will not be removed from section 8 powers during the government’s consultation and the talk is they will be bolstered and improved. To put the removal of Section 21 notices into some context…
Only 22,527 section 21 notices made it to Court last year, out the 4.5million private rented households
Scotland banned no fault evictions (i.e. their own version of a Section 21) two years ago, and the model suggested by Westminster is similar to that of the new Scottish system. Landlords, tenants and agents have had to adapt north of the border, and there hasn’t been the mass exodus of landlords from the market since then.
Yet the call in the lettings and legal profession is … if the Government is intent on making these changes, we need well-funded courts which specialise in housing and tenancy matters (like there are for family law and children). Especially when the landlord manages the property themselves (without an agent), the issue of eviction comes about from a breakdown in communication between landlord and tenant. The courts could use their mediation skills to make it simpler and faster for tenants and landlords to obtain quick and available justice instead of the existing drawn out procedures under Section 8, which helps no one (not even tenants). This is important as the demand for Birmingham City Centre rental properties is growing and people need a home to live in – fact.
Birmingham City Centre needs an additional 193 buy-to-let properties per year for the next decade to meet the demand from Birmingham City Centre tenants
As an agent in Birmingham City Centre, I know most Birmingham City Centre landlords consider buy-to-let in Birmingham City Centre as a long-term investment, with the average landlord looking to retain their buy-to-let property for at least 10 years and beyond. Talking to other agents around the country, over 90% of Section 21 notices are made by the tenant, not the landlord. Removing the Section 21 notice could affect tenants more than landlords.
Replacing Section 21 with a process that requires a landlord to firstly have a good reason, and secondly go through due process, will likely remove the more unprincipled landlords from the property market. That is great news as those unprincipled landlords will either sell their properties to new buy-to-let Birmingham City Centre landlords, or to tenants who want to buy them. So, it could be a small win for people looking for a new Birmingham City Centre home, and a disappointment for unprincipled landlords simply looking for a cash cow ‘have no care about the property or tenant’ investment vehicle.
If you are a Birmingham City Centre landlord and want to know more about this, whether you are a landlord of ours, a Birmingham City Centre landlord with another Birmingham City Centre agent or a self-managing landlord, feel free to drop me a line or pick up the phone (I don’t bite) to chat about the implications of this and other legislative changes that are on the horizon.
Are you a landlord and need advice on section 21 or the rental market in general then please feel free to contact me on 0121 296 2600.
James Forrester MD Barrows & Forrester Property Group and Author Birmingham Property News