Warnings over planned section 21 reforms

Government plans to abolish the assured shorthold tenancy (AST) regime could lead to fewer homes being available for rent, law firm Devonshires has warned.

Proposals to abolish ASTs and the use of section 21 of the Housing Act 1988 are set out in the Ministry of Housing, Communities and Local Government (MHCLG) consultation A New Deal for Renting.

This means landlords will be unable to evict tenants without giving a reason.

Instead, they will have to use one of the proposed additional grounds for possession, which sets out the reasons and circumstances under which a landlord seeks a court order to evict.

In its response to the consultation, Devonshires called for social housing to be exempted from the new regime, claiming the proposals fail to adequately guarantee that landlords would be able to regain possession in an efficient manner.

This is particularly so given that government has yet to decide whether to establish a housing court; it did not pledge any further investment in the courts in last month’s spending round; and HM Courts and Tribunals Service’s modernisation project for possession proceedings has not yet begun.

Devonshires said it was concerned about the unintended consequences of these proposals, for example, the loss of starter tenancies which are a useful tool for tackling anti-social behaviour and the potential impact on private sector leasing schemes – which provide much-needed housing options for the homelessness sector – where landlords may not be able to recover possession easily and swiftly.

“Notwithstanding the lack of funding, courts are already full of complex and lengthy proceedings involving housing issues. These proposals would only serve to exacerbate that,” Devonshires said.

The firm warned the proposals will make it more costly for landlords to recover possession meaning an increase in legal budgets – so less money for other projects including development and new homes being built.

It added: “Overall the proposals could threaten the supply of homes for rent, in both the private and social sector.”

Devonshires partner Nick Billingham said: “There is concern that the proposals may limit the supply of homes – for example, if private registered providers are not exempt, then the loss of starter tenancies may mean they will be less willing to take a chance on nominees from local authorities whose history suggests they may not be able to sustain a long-term tenancy.”

This, he said, would result in the incongruous position that a tenant of a local authority, who should have the highest degree of security of tenure, actually having the lowest because of a local authority’s ability to offer an introductory tenancy – a one-year trial tenancy where it is much easier to evict the tenant than usual.

Billingham added: “The reality is that the government needs to sort out the court system before it contemplates reform – all the rights in the world are of no use, for landlord and tenant alike, if they cannot be enforced in an effective, timely and cost-efficient way.”

The consultation can be viewed here.