A record number of Section 21 notices, enabling landlords to repossess their properties without specifying grounds, have been issued in the wake of proposed legislation changes. These alterations, part of the Renters Reform Bill, have caused unease among landlords, leading to a considerable increase in planned property sales.
Paul Shamplina, Landlord Action’s founder, has observed this uptick. April proved to be the busiest month in the organisation’s 23-year history, with a striking 91% year-on-year spike in the number of second stage Section 21 notices served.
Shamplina remarked, “As the termination date for Section 21 draws closer, it is anticipated that a growing number of landlords will experience anxiety, unfortunately resulting in many stable tenants being forced to vacate their homes.”
The government’s approach to accelerating court-based eviction processes by implementing digital systems was acknowledged by Shamplina. However, he expressed the need for a more comprehensive overhaul of the court system to inspire landlords’ continued participation in the market.
The upcoming abolition of Section 21 has sparked considerable apprehension among landlords, with a recent survey revealing that a third of the respondents identified this legislative change as a significant worry. The research, conducted by Mortgages for Business, found that 33% of landlords expressed concerns about the Section 21 reform under the Renters Reform Bill.
Government plans indicate a shift towards landlords being obliged to provide valid justification for evictions, such as rent arrears or antisocial behaviour, coupled with evidence of tenant misconduct. This change will significantly alter the current model, where landlords have the ability to evict tenants without a specified reason at the conclusion of a fixed-term tenancy under Section 21 of the 1988 Housing Act.
Gavin Richardson, the managing director of Mortgages for Business, indicated that concerns over the impending Section 21 removal are leading landlords to sell their properties rather than remortgage.
Emily Williams, a residential researcher at Savills, highlighted the lower end of the market as the potential hotspot for challenges. The proposed reform is expected to encourage landlords to conduct more rigorous tenant vetting, which could make securing a private tenancy increasingly difficult for those reliant on universal credit or local housing allowance.
