Court reform vital before Section 21 can be axed report warns

Section 21 should not be scrapped until Section 8 is reformed and a new specialist housing court is created, a new report published this week has warned.

The Lettings Industry Council’s (TLIC) ‘Beyond Section 21’ report was commissioned following the Government’s consultation on axing Section 21, which ran last year and received more than 20,000 responses.

TLIC, which the NRLA is a member of, warns there could be dire consequences if Section 21 is scrapped too suddenly, without the necessary reforms being delivered first.

The report says that there could be a 20% reduction in the overall supply of homes in the private rented sector, and that the justice system would be under more pressure, faced with a high court caseload.

It also suggests vulnerable tenants could be hardest hit if this were to happen, for example if landlords lack the confidence to stay in the sector and seek to either disinvest altogether or move their properties into a different area of the market, such as short term lets.

The “Beyond Section 21” report recommends the following measures should be introduced before Section 21 is abolished.

1. Strengthening the grounds of section 8 for which it can be used and to allow an accelerated process
2. The use of meaningful mediation to reduce the number of disputes resulting in court proceedings before they commence and save both sides substantial legal costs
3. Court reform including a modernised, specialist housing court for all housing related hearings, ensuring timescales for repossession can be reduced and a viable route for tenant claims against landlords for disrepair, poor conditions and management
4. Bailiff reform because securing the services of county court bailiffs is one of the longest delays for landlords, following the grant of a warrant for possession

The NRLA continues to campaign for a number of reforms to the court system, as well as a dedicated housing court, before Section 21 is scrapped altogether.

The association is calling for Section 8 grounds to be reformed, so that landlords have the confidence that they will be able to regain possession swiftly, when they have a legitimate reason to do so, and also for:

• increased resourcing of the courts, to address the lengthy process, including an increase in bailiff capacity across England and Wales
• the establishment of a specialist housing court or tribunal, to aid access to justice for both landlords and tenants

The UK Government intends to axe Section 21 in England, with the introduction of the Renters Reform Bill. Earlier this year, Housing Minister Christopher Pincher MP quoted the NRLA when confirming the Government would not be rushing through the legislation to abolish Section 21.

Theresa Wallace, Chair of The Lettings Industry Council (TLIC), said:

“The PRS has doubled in size over the last 20 years, which means any changes to the current regulations will have a huge impact on the life of millions of citizens. It is vital to strike a balance between the needs of tenants for long-term security and legal certainty, restoring landlord confidence to ensure an adequate supply of private rented homes. The social cost of abolishing Section 21 lies in the economic effects it will release and how the market will react to it. That is why the government must not proceed with its proposal to do so without careful consideration of the impacts and implementation of measures to mitigate such negative consequences.”

• To read the LIC report in full click here 
• The “Beyond Section 21” report has been conducted as part of a company consulting project (CCP) of the MBA programme 2019/2020 at ESCP Business School, London Campus on behalf of “The Lettings Industry Council Section 21 Working Group” in cooperation with ARLA Propertymark, Landlord Action – Hamilton Fraser, Tenancy Deposit Scheme TDS, Walker Morris LLP, Training for Professionals, Residential Landlords Association, National Landlords Association, Hunters, Savills (UK) Ltd (together, the Group)