Almost half (46%) of landlords and letting agents are more likely to remove some or all of their investments in the private rental sector as a result of the Government’s plans to abolish Section 21 notices.
The findings come from a new survey by the Residential Landlords Association (RLA) of around 6,500 landlords and letting agents – its greatest ever response.
The study also found that more than 40% of landlords are waiting for other planned changes by the Government to become clearer, before they make decisions on their ability to provide homes to rent.
These figures arrive just weeks after the Royal Institution of Chartered Surveyors (RICS) warned of private rent prices increasing by an average of 3% per year over the next five years, as a result of landlords being less prepared to let properties, while demand from prospective tenants rises.
In April, the Government announced plans to end Section 21 evictions, alongside proposals on improving the Section 8 process, under which landlords can repossess their properties on grounds such as rent arrears or anti-social behaviour. This procedure requires landlords to apply and be granted permission to repossess via the courts, yet official data shows that it takes over five months on average from application to repossession.
According to the RLA’s survey, of those landlords with experience of such repossessions, 79% did not consider the courts to be reliable. Almost 91% of landlords supported the establishment of a specific housing court, bringing together all housing disputes under a single body.
With concerns that landlords selling property will usually require tenants to be evicted, the RLA’s research revealed that 48% of respondents would be encouraged to purchase a rental property with a tenant in situ, if they could reclaim the 3% Stamp Duty surcharge on additional homes, on the condition that the tenants can remain in the property for a year or more.
The survey also found widespread support for new grounds to be established upon which landlords could regain possession of a property. This included, to sell a property and to ensure that tenancies can best meet the needs of certain groups, such as students, who do not require the indefinite style tenancies being proposed by the Government.
David Smith, the Policy Director of the RLA, says: “Security of tenure means nothing unless the homes to rent are there in the first place. With the demand for private rented housing showing no signs of slowing down, it is vital that landlords are confident that they can quickly and easily get back their property in legitimate circumstances.
“Whilst the system should clearly be fair to tenants, it needs also to support and encourage good landlords. Our survey shows how complex it will be to ensure that the grounds on which landlords can repossess properties are both clear and comprehensive. This needs to be underpinned by a court system that is fit for purpose and properly resourced. At present it is neither.”
He adds: “It is vital that the Government’s planned reforms are carefully considered, to avoid finding ourselves needing to reopen this whole issue later down the line.”