The likely abolition of Section 21 has raised significant concerns among landlords, particularly regarding their ability to manage their properties effectively. Without the option to evict tenants at will, many landlords fear they will lack options if a tenant causes damage or fails to pay rent. We look at what this legislative change will mean for landlords and how we expect it will affect the lettings market.
\nHowever, insights from the latest English Housing Survey published on 18th July 2024 should help mitigate these concerns. The data indicates that Section 21 evictions are relatively rare occurrences in the current market. In fact, 63% of private renters who moved in the past year did so voluntarily. The primary reasons for these voluntary moves include job changes, the need for a larger property, or to move to a different location.
\nEvictions accounted for only 9% of tenant moves. Among these, the majority were driven by landlords wanting to sell the property or move into it themselves. For the small number of tenants who were evicted, more than half were asked to leave informally, 37% received a Section 21 notice (used to evict tenants either after a fixed term tenancy ends, or during a tenancy with no fixed end date and you don’t have to give a reason), and just 2% were served a Section 8 notice (used if your tenant has broken the terms of the tenancy).
\nThese statistics should provide landlords with some reassurance. Most tenancies end at the tenant's discretion and even in cases of eviction, it is often because the landlord has a personal need to reclaim the property. The incidence of tenancies ending with a Section 21 notice remains relatively low.
\nA good case study of this system working can be found in Scotland, where Section 21 was abolished some years ago and has subsequently been functioning well without it. Kevin Fraser, Director of Property Management for our Scottish brand DJ Alexander spoke on this.
\n“Since the ‘no fault’ eviction ban in Scotland came into force back in 2017, we have found that the market has adapted well and with very little impact on our clients. The new legislation provided adequate alternative grounds for issuing notice to tenants, which we have used when they need to regain possession on behalf of our landlords. Most landlords issue tenants notice when the tenant has stopped paying rent, they are looking to sell, or refurbish their property and these grounds can still be used instead of a section 21, so the removal of this in England should not be a huge concern for those in the sector there.”
\nFor landlords who still feel uneasy about this change, there is an additional safeguard: rent and legal protection insurance. This insurance, priced at just £1 a day (or a % of your rent in some cases), offers a cost-effective way to ensure complete peace of mind. It protects against potential damages and rent arrears, thereby maintaining the security and profitability of your investment. Find out more about Rent and Legal Protection here.
\nWhile the abolition of Section 21 may seem daunting, the reality is that most tenancies conclude without issue, and as we have seen in Scotland, with the right alternative grounds for issuing notice continues to work well. Furthermore, with the right protections in place, landlords can continue to manage their properties confidently and effectively.
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