Posted on: 08 July 2019
What does the end of Section 21 mean for landlords?
Back in April, the government announced that they would be abolishing Section 21, which gave private landlords the right to a ‘no fault’ eviction, which would allow property owners to remove tenants from their property without a reason within 2 months.
Charities and private renters have been campaigning against Section 21 for years, and have celebrated the scrap because it was seen as an unfair way of removing tenants who had done nothing wrong. It was even claimed that Section 21 is one of the biggest causes of homelessness in the UK. So what does this all mean for landlords?
Why landlords needed Section 21
Whilst it is often believed that a landlord may want to evict a tenant because they have started to ask for things such as new boilers or extensive repairs, there is little truth to this claim, and there is actually some protection for tenants against Section 21. There are several reasons that a landlord may want to evict a tenant under Section 21, which you can take a look at below.
Selling a house
If a landlord has decided that they want to sell their property, it is best that tenants move out in time for the sale to go ahead. Section 21 meant that a landlord would not be penalised for asking their tenants to vacate the premises. If a landlord is facing financial troubles, selling a house is a quick way of easing money issues, so it makes sense for a landlord to be able to make a sale as soon as possible.
Change of circumstances
Despite what many may think, landlords are still human and have personal lives of their own. There may be a situation when a property owner may need to move into their own premises, where the tenants would be required to leave the property, but through no fault of their own. Whilst many charities and campaigners have shown concern to the wellbeing of renters, the scrappage of Section 21 doesn’t seem to have taken into account the wellbeing of the property owner.
An effective backstop for Section 8
Section 8 is a section of the 1988 Housing Act that outlines how a landlord can evict their tenant under certain criteria, however, many believe that it is ineffective, time consuming and costly to evict a tenant under Section 8, rather than using the ‘no fault’ method of eviction. The National Landlords Association (NLA) estimate that Section 8 takes a landlord an average of 145 days and £5,730 to repossess their property, compared to 104 days and £3,525 under Section 21.
When is the ban coming in?
Whilst the decision to scrap Section 21 was announced in April 2019, there has been no official indication as to when Section 21 will be removed from UK legislation.
What can you do?
The decision to scrap Section 21 seems to be a quick fix for private renters, but may cause problems further down the line for both renters and landlords. Some have predicted that a response to not being able to evict a tenant may result in landlords simply raising their rent to price their tenants out.
The proposed changes will go through a consultation process, which will be launched shortly, before the ban comes into force. The Government has promised to work with tenants, landlords and others in the private rental sector on changes to the system.
Property insurance with Premierline
Whilst Section 21 and Section 8 are designed to help you as a landlord, you will need a comprehensive landlord insurance product that protects your income, building and contents.
Get in touch with Premierline to speak to one of our insurance advisors who will assess your business’ needs, and compare quotes with some of the UK’s most well-known insurance providers to find you the right insurance for your business.
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