The latest demand by anti-letting agent pressure group Generation Rent is for the government to abolish the right of landlords or their agents to evict tenants through Section 21.
"A tenant can pay the rent on time every month and otherwise behave impeccably, and yet still be asked to leave with two months’ notice, with no appeal and no help. The influence that house prices have on the level of evictions utterly refutes any claim that tenants are adequately protected" says a blog on the campaigning group's website.
"We are calling [on] the government to reform the rental market to give tenants better protection from eviction and greater stability in their home, and encourage landlords who are committed to providing long term homes – instead of investors who will sell as soon as the price is right" it continues.
The reason behind the group's latest attack on the letting sector is research which it claims shows that the numbers of S21 evictions have risen in recent years.
Citing research undertaken with Oxford academic David Adler, the group says S21 evictions have increased roughly in line with house prices.
"If prices are rising, then landlords are more likely to decide to sell and evict their tenants in order to do so. When prices are falling, landlords are less likely to try to sell and more likely to retain their rent-paying tenants. There is a consequent downward pressure on rent levels. This pressure reverses following an increase in evictions" says the group.
Using Office for National Statistics data, it claims that both house prices and evictions began to fall in the first quarter of 2008.
"House prices began their ascent first, in the second quarter of 2009. Evictions then followed, picking up again in the fourth quarter of 2009. And again, the rental index lagged behind — bouncing back only in the third quarter of 2010" it claims.
It follows this apparent correlation through to last year when the group says the number of accelerated evictions was 16,441. This compares with 4,963 such cases in 2009, when the market drove house values down.
"A 10 percent increase in house prices is on average associated with an increase in evictions of over 60 per cent in a given local authority" says the blog.
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What a great idea. Let's remove landlords power completely to serve notice on tenants just because, heaven forbid, they may want to sell their property, let a relative move in or any one of a dozen reasons. Why not make it so that only tenants can serve notice? Good lord, are there actually any grown ups at Generation Rent?
As for government encouraging landlords; obviously I agree with this sentiment but lets hope the new money-man does as well!
The ever-so-slight flaw in this idea is that if investors couldn't regain their property easily they wouldn't let it out in the first place, as happened prior to 1989.
We need to remove section 21 mandatory possession notices. It is divisive.
Under the rent act 1977 there was provision for people who wished to let their home for a short term to serve a notice that the house was their main residents and they intended to return. This allowed tenants to know beforehand that the property was a short term letting. Landlords could not serve this notice if they were not living in the house as their main residence beforehand.
Landlords can still sell their properties with the tenants in occupation. They may not be able to get their full value but they are likely to get a significant percentage.
It will also rebalance the housing sector and increase home ownership and that is a good thing for society.
Removing landlords rights to remove tenants, so that they may sell their property to first time buyers (for example) will rebalance the housing sector how exactly?!
A situation where a landlord can only regain a property if they wish to live in it themselves is not the basis of a modern lettings market. It is more akin to something from the 1800s.
The idea of the tenancy reforms in the late 1980s was to create a modern, competitive property lettings market where landlords could let their property with the confidence they would not end up with an unwanted sitting tenant for decades. And also one where tenants could vote with their feet and move freely and easily to the best deals. The system kind of works as intended.
If anything it is the wider property market that is broken, not the lettings market.
As a landlord I think the section 21 notice is weighed just a little too far in my favour. Two months is not enough time for a tenant to find another home unless they act very quickly, which most people do not.
I think a minor changes to the section 21 would help, simply adding a month to make a three month notice would help tenants and adding a clause that tenants must allow viewing during the three months would help landlords.
It takes 2 months from viewing to completion to sell a property usually. If a landlord gets a buyer in the first month of the section 21 then the rent carries on right up until completion, no void period.
No matter what government and pressure groups do do tax, discourage, and control the BTL private landlord market, there is only one remedy to the UKs housing problem, its so obvious, only a government could fail to see it......build (lots of) state owned homes and don't sell them.
Government could afford to keep rents affordable which would add proper competition to the private landlord. I have no problem with competition and huge problems with MR Osborne's attack on the lettings industry. I notice the soft furnishings industry got a nice reduction in its corporation tax.
I agree! The Section 21's essential - otherwise the risk of letting to people who don't pay is too great - what this latest attack on landlords fails to acknowledge is that if the landlord could not pay the mortgage/their new (BTL landlords are the root of all evil and 100% responsible for our xxxx economy) government imposed tax bill the home would be repossessed and the tenant kicked out anyway!
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