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Landlord Dilemma: Could the Renters’ Reform Bill Escalate Homelessness?

Data from the Department for Levelling Up, Housing and Communities indicates that in the fiscal year 2022/23, 24,260 households served a valid Section 21 notice were eligible for council assistance.

The Renters’ Reform Bill, if enacted, aims to abolish ‘no fault’ eviction notices, as Section 21 is set to be rescinded. Consequently, all evictions would fall under a ground outlined in Section 8 of the Housing Act 1988. This has sparked concern among politicians and industry experts, who predict a possible surge in homelessness.

Under the current framework, tenants evicted through Section 21 automatically qualify for aid from local councils. However, this provision will not extend to Section 8 evictions. The government’s stance is that “there is no need for the legislation to have a unique requirement around eviction notices.”

Angela Rayner, Labour’s Shadow Secretary of State for Levelling Up, Housing, Communities & Local Government, voiced her concerns during a debate on the Renters’ Reform Bill, stating that “the Bill removes that right to immediate help… [which] could lead to a huge spike in homelessness [that loophole] must be closed.”

A study by PayProp, a rental payment and client accounting specialist, reveals that the top three reasons for issuing a Section 21 notice will persist as grounds for eviction under the proposed Section 8 reforms. These reasons include landlords wanting to sell the property, rent arrears, and landlords seeking to move in themselves or accommodate close family.

Neil Cobbold, Managing Director of PayProp UK, suggests that the abolition of Section 21 is unlikely to significantly decrease tenant evictions, given that the courts have the capacity to manage all evictions transitioning to Section 8.

Moreover, tenants evicted for rent arrears under Section 8 may find it challenging to secure future properties. The latest English Private Landlord survey discloses that “more than four fifths of landlords (84%) were unwilling to let to tenants with a history of rent arrears.” Presently, tenants evicted under Section 21 may not carry a money order judgment for rent repayment, potentially keeping their arrears history private. The proposed changes will make this information publicly available.

Cobbold emphasises the need for stability and court reforms. He warns, “If landlords leave en masse, then no amount of rental reform will bring down homelessness,” and further notes that reasons for eviction will be explicitly marked on the tenant’s record under the new bill, potentially making it harder for them to find privately rented property.

He concludes that ensuring a stable private rented sector is pivotal, and landlords must feel secure in their ability to efficiently reclaim properties through the court system when necessary.