Jamie Gollings is the Deputy Research Director at the Social Market Foundation
It seems that the Department for Levelling Up, Housing, and Communities are resigned to pulling measures to ban no-fault evictions from their Renters Reform Bill. In a recent letter to Conservative MPs, Jacob Young, the Levelling-Up Minister, outlined plans “to require the Lord Chancellor to publish an assessment on barriers to possession and the readiness of the courts in advance of abolishing Section 21 for existing tenancies”.
This refers to Section 21 of the Housing Act 1988, which gives landlords the right to evict tenants with two months’ notice, even if they have perfectly abided by their tenancy agreements, whenever they wish.
Fears of court overload are the reason cited by Young, and some MPs in debates on the issue. On this point, it is not as if Section 21 cases do not already burden the courts – the third quarter of 2023 saw a 7 year high of such proceedings.
Evidence from Scotland also suggests that the court backlog argument is a weak one. From December 2017, Scotland effectively abolished no-fault evictions except under specific grounds (rent arrears, antisocial behaviour etc). This did not seem to increase caseloads prior to the pandemic.
Before the ban, in 2015/16, there were 14,690 such cases initiated in the Sheriff Courts, plus 355 housing related cases in the Private Renting Housing Panel in the 2015 calendar year, so around 15,000 in total. Post-ban, in 2018/19, there were 12,407 cases in the Sheriff Courts, and 3,781 in the new First-Tier Tribunal Housing and Property Chamber – a total of 16,188. By 2019/20 there were 14,632 altogether.
That’s an increase of around 8 per cent from 2015/16 to 2018/19, and a drop below 2015/16 levels in the year to the 31st of March 2020. This hardly seems like the Scottish court system was drowning in a flood of new cases, and while increased demand should be prepared for, it should not be a barrier to the abolition of Section 21.
Another prominent argument for keeping no-fault evictions was that this diminishment in control over their properties would cause landlords to exit the private rental market. Marco Longhi claimed that “not only is this very bad for landlords, as exemplified by how much landlords are leaving the market in their droves – for this very reason it’s also a terrible deal for tenants.”. Another backbencher is said to have learned from fellow MPs that “those who are small landlords are very adamant of the view that it is very damaging and in some cases they might want to give up.”.
How well does this argument stack up? We at the Social Market Foundation are carrying programme of research on the housing crisis, funded by the Nuffield Foundation. A recent report that I co-wrote with Niamh O Regan as part of this work asked what we can learn from experiences in the rental market overseas.
England and Wales, along with Ireland, are among the last places in the West where landlords can turf out their renters without giving, or even having, a good reason. Countries like Switzerland, Denmark, Germany, Austria, and the Netherlands all ban no-fault evictions, whilst having private rental sectors twice the size of ours. Those places that allow some form of eviction mid-tenancy, such as Italy, France, and Spain, only do so under certain permitted circumstances, such as when the landlord is moving back in.
When Scotland effectively banned Section 21, it also introduced other measures strengthening renters’ rights. In the years that followed, not only did the private rental sector (PRS) grow north of the border, it did so whilst the English PRS stagnated – as SMF has previously shown. In 2018, there was a 0.5 per cent increase in Scotland’s PRS, whilst England’s shrank by 1 per cent. The next year, in 2019, there was a 4.5 per cent swing towards the PRS in Scotland compared to a fall of 3 per cent in England. Taking the right of no-fault evictions away from Scottish landlords has not noticeably wounded PRS supply.
Ireland’s Residential Tenancies Act of 2014 gave private rental tenants the right to stay in their homes for a further three and a half years if they had been renting somewhere for six months. This was a big burden on landlords, and a significant cut to their control of their property. However, rather than fleeing the market, Ireland’s private rental sector doubled as a share of the Irish housing stock.
Further afield, several Australian states have increased tenant rights in recent years. In Victoria, a study found no effect on investment in the private rented sector. In New South Wales, they found that improved regulation actually resulted in fewer exits.
Unless there is something uniquely flighty about English landlords, the international evidence does not give credence to MPs’ fears that dropping Section 21 is going to cause an exodus from the private rental sector. Renters in the UK already spend more as a share of disposable income on housing than anywhere else in Europe (except for much wealthier Norway and Luxembourg). The Government should bring the country in line with its peers, stick to its promises, and finally start reassuring renters that they can’t be thrown out of their homes on the whim of their landlords.
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Author: Jamie Gollings
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