Why Landlords should be concerned about what the Renters’ Rights Bill could bring.
LandlordZONE founder Tom Entwistle comments.
No responsible landlord wants to evict a tenant. You want them to pay the rent and stay as long as possible, but sometimes you have no choice. By far the most common reason for evicting a tenant is for nonpayment or persistent delay in paying rent. Second order reasons usually boil down to anti-social behaviour, damage to the property or failing to allow access for repairs etc.
But nearly 28 weeks? That’s how long landlords in England and Wales are now waiting on average, to evict a tenant through the courts. And that’s using Section 21 the quicker way to evict. This option will soon be no longer available.
If that doesn’t give you pause for thought, what will? The latest Ministry of Justice figures show the average eviction timeline has risen to 27.9 weeks, up from 25.4 weeks a year ago. That’s the best part of seven months. A painful prospect, especially given the fact that most evictions mean that no rent is being paid during the wait. For landlords dealing with unpaid rent, anti-social behaviour, or simply trying to get their property back, its soul destroying.
The cause is quite obvious: the courts and court bailiffs are way behind schedule, overloaded with work and creating these long delays. And with the Government pressing ahead with the Renters’ Rights Bill, which will abolish the Section 21 “no-fault” evictions, it can only get worse in my opinion. In its stead remains the only option - Section 8.
This is a process, unlike Section 21, that requires a court hearing. It’s an adversarial system where the onus is on the landlord to justify / prove the specified grounds of their claim for possession. It’s often fraught with difficulty, expensive and long-winded. Far from streamlining the process of eviction, this is likely to create even more pressure on a system already buckling under the strain.
The Government’s view – that of Matthew Pennycook MP, appointed Minister of State at the Ministry of Housing, Communities and Local Government on 6 July 2024 - is that most accelerated possession claims will disappear once Section 21 goes!
How does he reach that conclusion? Does he mean that with the higher hurdles necessary to achieve a successful eviction, fewer tenants will actually get evicted, so landlords will simply be discouraged from even trying to evict?
What might well happen in practice would be a big increase in other types of possession claims using the updated grounds for possession under Section 8. The net result of that will be even longer delays, due to the complexity, uncertainty and court time involved with these claims.
Section 8 evictions take longer, they are in person hearings and they regularly get rescheduled hearings when the judge requests more evidence. It begs the question of how the government can possibly free up more court time?
With the private rental sector (PRS) currently in limbo, and new supply remaining flat, awaiting the outcome of when the Renters’ Rights Bill is eventually implemented, there is an urgent need to restore landlords’ confidence.
These court bottlenecks, increasing eviction timelines, and the uncertain regulatory horizon are destroying rather than boosting confidence in the system. It’s leading to more landlords throwing in the towel, a lack of supply and steadily increasing market rents.
Ultimately, in my view, as with rent controls, it’s the tenants who suffer most; they suffer because they can’t find suitable accommodation, and what they can find is too expensive. Are we to repeat the same cycle we went through in the 1960s and 1970s where the rental market shrunk to less than 10% of the market?
When I started my landlording career, just as the shorthold tenancy was introduced, one small ad in the local paper produced around 30 telephone enquiries the same day, the phone was ringing off the hook, the demand was so great for rental accommodation. Most landlords had been driven out because of the draconian measures introduced over previous years – a tenancy for life with full security of tenure – that was the Rent Act (regulated) tenancy.
Possession claims are down by 9% apparently, but the time it takes to actually evict someone has increased. Why? Because of the process – despite Section 21’s title of “accelerated possession” it’s still a long-winded process.
Currently:
Specialist property lawyer, David Smith points out that delays have grown by nearly three weeks over the past year, while Paul Shamplina of eviction specialist Landlord Action has warned of judges adjourning cases for “flimsy” reasons. The National Residential Landlords Association (NRLA) has reported that some landlords have faced waits as long as 32.5 weeks. The picture in the capital, in particular, is delay blackspots, accounting for a third of all repossessions nationwide.
In other words, landlords in the unfortunate position of having to evict – and admittedly this is a tiny proportion of the thousands of tenancies overall - are already struggling under Section 21, what will it be like under the new regime?
First of all, it’s the cost: every extra week and month of delay means more lost rental income, that’s often on top or an already large build-up of arrears. There are the legal fees involved if you use a solicitor or eviction specialist (recommended as these are usually fixed fees) and if you have a mortgage, you have to fund the interest payments when there’s no rent coming in. Unless you have cash reserves a seven month wait can create a large loss-making period.
The change to a new regime, the move to a Section 8 option limits landlords’ options to specific grounds for possession. Although the government is claiming an expanded list of grounds for possession these are often difficult to prove. Landlords, agents and specialists will need to be considerably more savvy at achieving a successful eviction outcome, even when it is quite evidently justified.
This process is slower, more complex, and often contested in court, with long delays if hearings are rescheduled to provide more information / evidence – a common occurrence. So, my argument is that rather than freeing up court time, the change will almost certainly result in longer delays - how can the government reasonably claim otherwise?
Landlords need certainty if they are to continue to invest in the rental housing market. If the outcomes for processes like these are uncertain, expensive and offer long delays, confidence for investing in buy-to-let will simply evaporate. There’s already credible evidence to show that landlords are exiting the PRS as they simply don’t want the hassle anymore.
Therefore, supply will suffer as the private rental market shrinks, leading to higher rents and less available accommodation for tenants, ironically the exact opposite of what the government says is intended, as it promises by introducing more tenant safeguards within the Renters’ Rights Bill.
The government says the Bill will significantly reshape the private rented sector in the UK. It aims to shift the balance of power in favour of tenants. Here are some key elements affecting any landlord wishing to evict:
The Government argues this will give tenants greater security. Yes, but landlords and legal experts are warning that the courts simply are not equipped to deal with any extra demand for evictions, which could overwhelm the system. They are warning that delays of six to nine months could become the norm.
If ministers are serious about this reform, in a way that gives landlords confidence that it will work, they need to fix the court system.
The government could ease landlords’ pain by investing in the courts and the courts’ bailiff services. But given the state of government finances, is it likely to happen? I don’t think so. The courts desperately need more judges, more admin staff and more bailiffs.
Digital case management systems have been muted, and there’s always the possibility the ombudsman could be given more powers to take pressure off the courts.
More investment, alternative dispute resolution, more support for a landlord-tenant mediation service to reduce cases going to court, a phased implementation of the new legislation and a swift, fair process for recovering properties when it’s genuinely necessary, would calm landlords’ fears.
I might be wrong in my assertions and, in a way, I hope I am: if waiting times for evictions does come down because of the Renter’s Rights Bill, that would be great - I just can’t see it happening.
I think landlords are right to be concerned. At nearly seven months, current eviction delays are already unsustainable. The Renters’ Rights Bill, without serious reform of the courts, has every sign of making the situation worse.
An already fragile landlords’ confidence in the future of the buy-to-let renting business could become worse. Without that confidence the private rented sector will continue to shrink, rents will rise, tenants lose out, and we could see a re-run of the 1960s and 1970s. For the good of the national economy, that must be avoided at all costs.
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