The Effect of Section 21 on Derby Landlords..

Following my video on the soon to be abolishment of Section 21, I have had a number of Derby landlords contact me anxious that removing a tenant from their Derby buy-to-let property in the future will suddenly become a lot more problematic.

Yet, at the launch of the consultation on the changes to the piece of legislation relating to no-fault evictions – Section 21 – the Government wanted to assure British landlords that they would be protected by the bolstering of the existing Section 8 legislation. The current Section 8 allows landlords grounds for recovery of their properties for reoccupation of the landlord, non-payment of rent and other legitimate factors.

Over 17,500 Derby landlords are affected by this  potential change in the law

Yet, it is comforting for Derby landlords and tenants in the fact that most competent letting agents very rarely have to evict a tenant. In the worst-case scenarios the tenant needs evicting (normally because rent hasn’t been paid) or because the landlord is either selling their buy-to-let investment or moving back into their property. If you look at the consultation – it has been indicated that those grounds will not be removed from section 8 powers during the government’s consultation and the talk is they will be bolstered and improved.

To put the removal of Section 21 notices into some context…

Only 22,527 section 21 notices made it to Court last year, out the 4.5 million private rented households – that’s 0.5%

Scotland banned no fault evictions (their own version of a Section 21) two years ago, and the model suggested by Westminster is similar to that of the new Scottish system. Landlords, tenants and agents have had to adapt north of the border, and there hasn’t been the mass exodus of landlords from the market since then.

I said in my video that I believe that we need well-funded courts which specialise in housing and tenancy matters like there are for family law and children.

This is even more important when landlords manage the property themselves as, usually,  the issue of eviction comes about from a breakdown in communication between landlord and tenant. The courts could use their mediation skills to make it simpler and faster for tenants and landlords to obtain quick and available justice instead of the existing drawn out procedures under Section 8, which helps no one – not even tenants.

This is important as the demand for Derby rental properties is growing and people need a home to live in – fact.

As an agent in Derby, I know most Derby landlords consider buy-to-let in Derby as a long-term investment, with the average landlord looking to retain their buy-to-let property for at least 10 years and beyond. Talking to other agents around the country, over 90% of Section 21 notices are made by the tenant, not the landlord. Removing the Section 21 notice could affect tenants more than landlords.

Replacing Section 21 with a process that requires a landlord to firstly have a good reason, and secondly go through due process, will likely remove the more unprincipled landlords from the property market. That is great news as those unprincipled landlords will either sell their properties to new buy-to-let Derby landlords, or to tenants who want to buy them. So, it could be a small win for people looking for a new Derby home, and a disappointment for unprincipled landlords simply looking for a cash cow ‘have no care about the property or tenant’ investment vehicle.

If you are a Derby landlord and want to know more about this, whether you are a landlord of ours, a Derby landlord with another Derby agent or a self-managing landlord, feel free to drop me a line or pick up the phone to chat about the implications of this and other legislative changes that are on the horizon.