Could fewer rental properties be the price of positive action for tenants?

Could fewer rental properties be the price of positive action for tenants?

The Renters’ Rights Bill is set to overhaul tenancy laws in England and Wales, promising stronger protections for tenants, including an end to ‘Section 21’ repossessions. Now in its second reading in the House of Lords, the legislation aims to curb unfair evictions, but concerns are growing that it could unintentionally shrink the rental market.

Also known as ‘no fault evictions’, the Section 21 procedure - named after the relevant section of the Housing Act 1988 - currently allows landlords to regain possession of their properties without having to provide a reason. It is often used in cases where tenants fail to pay rent instead of lengthy court proceedings, or when landlords need to sell a property or to move in themselves.  But it is also seen as a loophole for a minority of unscrupulous landlords who make use of it for ‘no reason’ evictions, such as in retaliation for complaints about property conditions or to pressure tenants into accepting rent increases.

Under the new system, landlords will first have to prove they have valid grounds for eviction against certain specific legal grounds, such as rent arrears, anti-social behaviour, selling or occupying the property themselves, or a significant breach of the terms of the tenancy agreement.  The different grounds have varying notice periods, ranging up to four months.

With county courts already under significant pressure, and delays in hearings and bailiff appointments stretching for months, proving grounds for eviction is expected to increase the volume of contested cases, further slowing down an already overstretched system.

“While the sector welcomes greater security for tenants, the changes are expected to have a significant impact on the time and cost involved in regaining possession of a property, even where landlords have transparent and valid reasons,” explained property  expert Laura Cartwright of solicitors Bell Lamb & Joynson in Merseyside.  “It could take as much as a year to evict a non-paying tenant in some areas.  If a claim is defended, the process could take even longer — potentially up to 18 months from the point of first non-payment.”

For landlords with mortgages, or those relying on rental income for retirement, these delays could pose serious financial risks.  Faced with the potential of extended legal battles and accumulating rent arrears, the predictions are that many small-scale private landlords will be forced to reconsider their position in the rental market.

If more private landlords sell up and reduce the number of rental properties available, it could drive up rents and result in bad news for tenants.

Laura added:  “With the Bill now going through its final stages in the House of Lords, these changes are moving from the horizon into the immediate sightline of landlords.  It’s important they review tenancy agreements and familiarise themselves with the new legal framework.  If they’re working with letting agents, they should be conducting a full review of all current tenancies and asking what processes are in place to manage risk at every stage and to ensure compliance with leases.

“Getting some specialist guidance on the new legislation early on will help in navigating the evolving rental landscape and avoid unnecessary disputes and potential loss of income later.”

This is not legal advice; it is intended to provide information of general interest about current legal issues.