The upcoming abolition of no-fault eviction notices could trigger a flurry of evictions as private landlords look to sell up before the new restrictions come into effect, lawyers fear.
In the recent Queen’s Speech, it was revealed that section 21 of the 1988 Housing Act, which permits landlords to evict tenants without reason and with two months’ notice, is to be overturned. However, it is feared that the announcement could prompt a rush to market in the absence of clarification on how the changes will affect landlords who genuinely want tenants out so they can sell their investment.
Michael Stock, Head of Property Department at London law firm OGR Stock Denton warned: “There will be many tenants evicted before legislation is passed. We will potentially see panic evictions and a surge in private landlords selling their rental properties. Consequently, we’ll see a reduction in properties in the private rental sector, the ripple effect of which will mean more stress on the rental market. It could cripple the sector. I don’t think this has been thought through at all.”
He is calling for more information to be made available about what rights landlords will have should they want to remove a tenant and sell their property. He said: “Landlords could now be held to ransom by a tenant who refuses to leave after the term of the lease is up. No buyer is going to hang around while the matter progresses through the courts. It’s all very well saying you can’t evict a no-fault tenant but there will be exceptions where a landlord wants to sell.”
The abolition of Section 21 was initially proposed by Theresa May in April 2019. The Conservative manifesto stated that “private landlords will no longer be able to evict tenants from their homes at short notice and without a good reason”. However, Mr Stock is seeking more clarity and has raised his concerns with Michael Gove, Secretary of State for Levelling Up, Housing and Communities.
He also fears that some tenants may obstruct fair rent increases if they are protected by the new rules and that some landlords may be prevented from reoccupying their properties.
He said: “I can see an argument for rules that stop unscrupulous landlords coming up with a sham sale or unilaterally putting up rent unreasonably to get a tenant out, but there will also be room for mischief from tenants who can dispute fair rent increases and just staying on where there is a genuine proposed sale, knowing a landlord can’t get their tenants out.”
Currently, tenants are still able to contest Section 21 notices through the courts, and it can take several months before a verdict is reached and the landlord is able to regain access to their property.
Stock added: “There is a genuine fear that this is going to have a detrimental impact on landlords and their properties in several genuine scenarios, particularly small investors who have one or two properties and are hoping to sell one to release funds. I can’t see any drafting in the proposed legislation to cover such scenarios and it’s a potential ‘own goal’ that the government is going to score with its traditional supporters.”