![A woman's hands either side of a house model representing property advice.](https://www.landlordvision.co.uk/blog/wp-content/uploads/2024/05/119327426_m_normal_none_11zon-1024x678.jpg)
A landlord friend asked me a question last week and it has given me food for thought.
“I you could change just one thing in the private lettings business what would it be – excluding finance and taxation – something realistic.”
I am a list person, and I began to write my list as soon as I arrived home. I wrote my list then I put it in priority order and finally chose the one thing which I believe would make the biggest difference to our business. This will surprise many people and at first you may say “there are much more important things than that”. At that point, please write your own list, put it in priority order and finally choose the one thing which you believe will make the biggest difference, not just to you but to the private rented sector in England.
Here is mine:
To make it unlawful for a local authority to tell tenants who have received an eviction notice to “wait for the bailiff” or even “wait for the court order” before asking that local authority for accommodation or help to find some.
As long ago as 2016, the then Housing minister, Brandon Lewis, wrote to all chief executives of local councils reminding them of the guidance about homelessness.
“Authorities should not routinely be advising tenants to stay until the bailiffs arrive; there is no barrier to them assisting the tenant before this. By doing this, local authorities miss a valuable opportunity to prevent homelessness.”
Later, under the Homelessness Reduction Act 2017 and the Homelessness code of practice, local authorities were instructed that they: “should treat a Section 21 notice as a trigger to support tenants with a homelessness action plan”. They were given extra funding under Homeless Prevention Grants – £109m allocated across England for 24-25.
109m_HPG_top_up_funding_24-25.ods (live.com)
“This plan involves collaborating with the tenant to secure suitable accommodation, either in the private rental sector or social housing. Ideally, this process should occur before a court order is granted, and it would be unreasonable for a tenant to stay beyond the section 21 notice’s expiration.”
That last sentence is the crux of the matter. To force people, who have done nothing wrong, to go through the stress and humiliation of being evicted by a bailiff, in my opinion, is a crime against humanity and one for which landlords are constantly blamed. Landlords are only using the legal process given us to reclaim a property which we need to take back but where the tenant has done nothing wrong. It is the local authority which has told these tenants that in order to get their help they must actually be homeless – this is not what the law says, they are actually meant use the funding to take action to “prevent homelessness”.
“The first £200 million is allocated according to a formula which reflects relative homelessness pressures, while at the same time aims to reflect persistent Temporary Accommodation pressures faced by local authorities.
We have calculated relative homelessness pressures by adding the total number of prevention and relief cases to the number of prevention and relief cases achieved by securing a private rented sector tenancy, with the following adjustments:
To take account of different private sector rental costs in different areas.
To ensure a minimum allocation level of £40,000.
To ensure that no authority receives an allocation less than 90% of their 3-year average historic spend share on temporary accommodation costs”.
Previously in response to the 2017 Act, some local authorities actively promoted an offer to assist landlords to prevent them evicting tenants, using this funding, by offering to pay rent arrears providing the landlord agreed not to evict or by offering assistance where the tenant was in breach of the tenancy agreement through lack of knowledge or skills. Both these offers achieved some success, but they were only ever going to plug the leak temporarily. Unfortunately, the unintended consequences of removing the interest on loans/mortgages from allowable expenses has caused many landlords to sell up, and therefore has added to the number of people needing help from local authorities and reduced the number of private rented properties available and no amount of extra funding is going to balance that out.
As a landlord, I care about this issue for several reasons and not all of them relate to landlords for example:
Imagine being the parents of a young family who have been good tenants, always paying rent in full and on time and taking good care of the property, getting on well with the landlord, neighbours and becoming part of the community– this is the private rented sector at its best and in my experience this is why so many landlords are able to continue to self-manage. Now, the landlord is losing money because of interest rises and tax changes and must sell up. That landlord will hate having to serve notice on their tenant and will try hard to avoid taking them to court, but often the rent has been kept to a low level and the tenant cannot find another property in the area that they can afford or where the landlord will accept their income level. They have children in education and really want to avoid uprooting them, especially mid-school year, when they are already going to lose their homes.
These tenants have no option but to go and ask the local authority for help. Some of them hope for a “council house” many do not, but have no choice. I really cringe when I read comments from ignorant people who say things like: “They need to find a new rental”. If it was only as easy as that – as it once was. I have read posts on my Facebook group from tenants who are worried because they know that their only hope is a council property in an area which isn’t fit to raise young children nor young teenagers and where schools are failing. The reality is that most local authorities have very little accommodation to offer, and when they do it is often in an area where there is a high crime rate, high anti-social behaviour, alcohol and substance abuse …… The alternative is a room in a “hotel” which barely meets the criteria for the name and where they find themselves among more anti-social behaviour and all of the above, with no cooking facilities and struggling to make their money cover eating ready meals etc.
Unfortunately, too many people have watched TV programmes where often the tenants are those who have caused themselves to be evicted, often for non-payment of rent even where they receive benefits to cover it, anti-social behaviour or causing major property damage. When did they show a decent working family who have been good tenants suffering the humiliation of being watched by neighbours as they are removed by the bailiff? Those people are probably too dignified to want to be humiliated on national TV and if not it would be too boring to watch. Make no mistake, there are a growing number of tenants who are being evicted because they have been told by their local authority that they will not even help them with temporary accommodation while they find a new home until they have been served a section 21 and have a court order and often until the bailiffs are on their way. It is shocking and so unnecessary.
Before I tell you how I would change the system, let’s look at the other side of the coin, where tenants are deliberately using the private rented sector to raise their priority on the local council housing list.
Unfortunately, some landlords do not understand that when a tenant asks them to serve a section 21 to help them get council housing what they would be doing is assisting in fraud. Some tenants intend to make a fraudulent claim that they are being evicted for no reason and have nowhere to live, thus pushing themselves up the priority list and forcing the local council to offer them accommodation. Ironically these tenants have a very outdated view of what the council will offer them and see themselves in a nice little house with garden at a subsidised rent. If a local authority finds out that the landlord has colluded with the tenant, they can prosecute the landlord as well as the tenant.
Where there are children involved, a local authority cannot leave them homeless and often those tenants have left owing the landlord thousands but must be found accommodation. Those tenants without children who have left rent arrears will have been deemed to have made themselves intentionally homeless and the local authority has no duty to accommodate them. This is something else that landlords don’t seem to understand. When we use section 21 (no fault eviction) we are, in effect, saying that the tenant has been a good tenant, but we just need our property back. This is the purpose of section 21. Those landlords who avoid section 8, for reasons that I cannot understand, are assisting the tenant to commit fraud by hiding the reality of the eviction. Those landlords have shot us all in the foot because the statistics show that most tenants are evicted for no reason – section 21 – where, in reality, I don’t know one landlord who would evict a good tenant unless they needed to sell up. This is where the calls for removing section 21 come from and it’s easy to see why anyone who wasn’t a landlord would think it so unfair that good tenants have to live with this hanging over their heads when they rent from private landlords. WE NEED TO STOP MIS-USING SECTION 21
Section 8 is usually much quicker than section 21, both usually end up in court, but a section 21 takes 3-5 months to get a hearing and the notice is often found to be defective when a free solicitor sees it on the day of the hearing. Even a question which cannot be answered with proof can facilitate the judge giving the tenant more time to make their defence. It shouldn’t be like this, but this is reality, and it can then take at least 2-3 more months to get back into court where the tenant often doesn’t turn up because they made a bogus claim and don’t want to be told off by the judge.
When the tenant owes us rent and we use section 8 we can claim the rent arrears, court costs and get possession in one hearing as long as we have clear proof of non payment. Often the tenant doesn’t even appear because they know they have no defence and will be evicted. That tenant cannot then ask the local authority to house them because they have clearly made themselves homeless.
If only the rent arrears cases were taken through section 8, the statistics would be so much closer to reality, not to mention the sub-letting, property damage, and serious anti-social behaviour. If we ever lose section 21, there are going to be some shocks in the statistics for evictions and landlords will begin to recover our reputations – we are not evicting to increase rent or for no reason at all.
The biggest change would be the reduced pressure on local authorities to offer accommodation to people who are “working the system”, the millions this would save in temporary accommodation could be invested in compulsory purchases, normal purchases, building and converting buildings etc.. Increasing the supply side by using money saved on the demand side.
WHAT EXACTLY WOULD I CHANGE?
- I would amend section 21, it would continue to be a “no-fault” eviction but the landlord could only use it where they have one of the following grounds:
- They need to sell – this would need a follow-up for them to register when the property is actually sold.
- When their lender is threatening repossession – this would need evidence from the lender.
- When they need to live in the property as their only/prime residence in the UK – with the usual proof.
All with a big financial penalty for a landlord misusing section 21.
- Enforce the requirement for the local authorities to act on the tenant’s receipt of section 21 which will definitely now be a “no fault” eviction and therefore the tenants presenting themselves will be those in genuine need of temporary help.
- Enforce a maximum term for people living in temporary accommodation so that there is not a log jam and families are not left in limbo for years.
“Subsidy rules from April 2017
For customers placed into non self-contained accommodation (board and lodging or licensed), Housing Benefit (HB) subsidy will be limited to the one bedroom self-contained Local Housing Allowance (LHA) rate based on the location of the property.
For those in self-contained licensed and short-term lease accommodation, the maximum HB subsidy will be determined by using 90% of the LHA rate for the size of the property.
The rules affect how subsidy is claimed they do not alter how the HB entitlement is calculated.”
Section 6: Temporary accommodation – GOV.UK (www.gov.uk)
UPDATE ON RENTERS REFORM BILL
I know that many people are pleased that there have now been compromises in the latest version of this important bill, but I am not one of them. Generally, I do believe that compromise is very important but not when all we end up with is half baked, people pleasing legislation which actually doesn’t help anyone in the end.
RENTERS REFORM BILL UPDATE
The following update was published on 18th April 2024.
The bill is now nearing the end of its journey through the houses of Commons and Lords the next stage will be on 24th April 2024 this is the Report and third reading of the bill.
These are some of the amendments which have been made:
- “prevent a tenant from ending a tenancy within the first six months (with some exemptions).
- require the Lord Chancellor to publish an assessment of the readiness of the county court possession system before abolishing section 21 ‘no fault’ evictions.
- apply the new ground for possession for student lettings to all properties, not just HMOs.
- prevent landlords from letting their property as short-term or holiday accommodation for three months after using the possession grounds to move into or sell their property.
- require local authorities to work with tenants who have been served a section 8 eviction notice to prevent them becoming homeless.
- require a review of the implementation of the tenancy reforms within 18months of measures being applied to existing tenancies.”
Renters (Reform) Bill 2023-24: Progress of the Bill – House of Commons Library (parliament.uk)
I often feel like I am in a different reality, and this is one of those times!
“A compromise is an agreement where both parties get what neither of them wanted.”
Author unknown