Ending S21 is fine says leading agent - but safeguards needed

The government’s renewed pledge to end Section 21 eviction powers for agents and landlords is fine, a leading industry figure has said - but there must be wider safeguards for owners and investors.

The comments come following the announcement of a new Renters Rights Bill: few details are available yet but it will scrap S21 and reform the grounds for possession.

The former president of ARLA Propertymark, Greg Tsuman - now director of lettings at the Martyn Gerrard agency - says: “The new Labour government has a real opportunity to actually deliver on Renters Reform, which under the Conservatives became trapped in a vicious cycle of becoming too complicated for its own good, so it is good to see that this has been included in the King’s Speech and is high on the legislative agenda from the outset. My main hope for this Bill is that that we see a version of it emerge under the new government that has been simplified and balanced, so that it actually works for all stakeholders.

“In particular, the key measure that needs to strike a fair balance between working for both landlords and tenants is of course the abolishing of Section 21, or ‘no fault’ evictions. In practice, landlords should not have an issue with this change in the rules, and I am likewise in support of getting rid of no-fault evictions as long as there are robust provisions in place that mean landlords are able to efficiently deal with problematic tenants who are abusing the system. 

“For the vast majority of the private rented sector, this is rarely a problem, but it is nonetheless a risk that landlords take on, and so they need to be protected or we could see a number of landlords exit the market. However, just stopping landlords from leaving the market cannot be the end goal. It is vital that the new government aims to encourage more private investment into the rental market to increase the number of homes available to rent in line with growing demand, which should include expanding the supply of affordable housing.

“Another measure that has previously been tipped for Renters Reform is abolishing fixed-term tenancies, which if introduced would create more problems than it would solve. Broadly speaking, both landlords and tenants want to enter long-term contracts which see tenants paying a fair price to be settled into a good quality home, as well as having peace of mind that their rent will not unreasonably increase and that the landlord has committed to not selling up during this period.

“We know that wider reform for the private rental sector is high on the new government’s agenda, and I suspect we will see further changes to the tax regime introduced later this year, possibly at the new Chancellor’s first budget statement in the Autumn. If this is indeed the case, I hope to see the government re-introduce mortgage interest rate relief for landlords, in recognition that the policy to remove this has only been detrimental to the market. It has failed as a policy and served as a core reason for rents increasing by around 40% since the changes were rolled out, making it more difficult for renters to find suitable homes, let alone save up to buy.  We’ll have to wait and see, but if the old idiom that change begets change is true, the new government has plentiful opportunity to change things for the better.”

The call for safeguards for landlords is echoed by safeagent, the not-for-profit accreditation scheme for lettings and management agents.

Chief executive Isobel Thomson says: "While welcoming the government's commitment to strengthening local councils’ enforcement powers, we highlight the need to ensure enforcement activity is properly resourced if these measures are to achieve the desired outcome.

“We would urge Government while seeking to level the playing field between landlords and tenants, not to alienate landlords and to recognise the vital role of landlords and agents in underpinning a safe and secure private rental sector for the majority of tenants. We look forward to more detail on the contents of the Bill and will be happy to work with government.”

Meanwhile Propertymark has reiterated its long-standing views that scrapping Section 21 without an adequate and workable alternative would trigger lengthy and costly delays for everyone involved, and that the volume of regulatory and financial pressures on landlords in recent years would further hinder investment in the private rental sector. 

This in turn could cause many more landlords to sell up and prevent future landlords from entering the market altogether. Potential consequences of landlords leaving the private rental sector include initiating a further shortage of homes for tenants, which will ultimately could push rents up even more.  

  Nathan Emerson, chief executive at Propertymark, says:  “The [Conservatives’] Renters’ Reform Bill caused great uncertainty for many landlords when it was introduced by the last government, so we hope that the new UK Government’s revised version of this legislation clarifies what new mechanism will be implemented if they succeed in abolishing Section 21.   

“Whilst Propertymark supports renters having firm rights to challenge unfair practice, any new legislation must strike a fairness for all involved. Ultimately, there is a concerning lack of housing stock within the marketplace, and there needs to be clear pathways and support for investment to help boost supply and provide choice for prospective tenants when it comes to choosing a new home.   

“Many tenants have also faced high energy bills in recent years, and while it is positive to see that the new UK Government has made clean energy one of its central pledges, Propertymark has long called for landlords and agents to be provided with loans and grants to make energy efficiency improvements in their homes, thereby allowing the housing sector to play a leading role in achieving net zero.”