Oct

Law firm says social housing should be exempt Section 21 reforms…

admin

Abolishing
Section 21:

The law firm
Devonshires says that the Government should exempt social housing
from its plans to abolish the assured shorthold tenancy regime,
claiming that the proposals could “inadvertently reduce the supply
of homes for rent.”

The Ministry for
Housing, Communities and Local Government (MHCLG) launched a
consultation on abolishing so called ‘no-fault’ evictions and
improving Section 8 grounds which closed last Saturday, 12th October,
after a 12 week period.

The Government is
proposing to remove Assured Shorthold Tenancies (ASTs) from the
Housing Act 1988 which would mean that all landlords, both private
and social, would be restricted to offering only the more
tenant-protected assured tenancies.

If the Government
decides to continue with the changes – and that is by no means
certain following the consultation exercise and a possible “change
of tack” after a new cabinet came in recently, with a host of new
policies – it would be a game changer for the industry.

Devonshires argues
that the proposals could have the unintended effect of reducing the
supply of homes for rent. This they say would affect the private
rented sector or those offered by private registered providers (PRPs)
of social housing.

If the assured
shorthold tenancy and the use of Section 21 of the Housing Act 1988
is abolished, landlords will be unable to evict tenants without
giving a reason in court, an adversarial system which introduces
uncertainly and costs for landlords, and a massively increased
workload for an already overstretched court system..

New grounds for
eviction would be introduced which landlords would need to rely on in
court in all evictions, setting out evidence, reasons and
circumstances under which they seek a Court order to evict.

Devonshires says:

“The proposals
fail to adequately guarantee that landlords would be able to regain
possession in an efficient manner,” the response says, given that
the government has yet to decide on whether to establish a Housing
Court, and did not pledge any further investment in the courts in
last month’s Spending Round. Further, HM Courts and Tribunals
Service’s modernisation project for possession proceedings has not
yet even begun.

“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.”

Devonshire’s
social housing specialist says that it already takes “an inordinate
period of time” to conclude legal proceedings.

“This means longer
delays and more pressure on an already over-worked court system. No
proposals have, as yet, been made to deal with that.”

Devonshires are
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.

Devonshires says the
proposals will make it more costly for landlords to recover
possession as well.

“This means an
increase in legal budgets which, in turn, results in less money to
expend on other projects including development and new homes being
built. Overall the proposals could threaten the supply of homes for
rent, in both the private and social sector.”

Nick Billingham a
partner and head of Housing Management and Property Litigation at
Devonshires, says:

“There is concern
that the proposals may limit the supply of homes – for example, if
PRPs 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.”

“It 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, for example.” This is a one-year trial
tenancy where it is much easier to evict the tenant than usual.

Nick Billingham says:

“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.”

Devonshires is a
‘full service’ law firm. From offices in London, Leeds &
Colchester legal services are provided throughout the UK, with
clients ranging from some of the world’s largest multi-national
corporations to private individuals.

The Proposal – A new deal for renting: resetting the balance of rights and responsibilities between landlords and tenants

View Full Article: Law firm says social housing should be exempt Section 21 reforms…