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Abolishing Section 21 could have serious impact on private rented sector

Rental Property

The private rented sector (PRS) could shrink by 20% if Section 21 ‘no-fault’ evictions are abolished, according to a new economic analysis report.

The report by Capital Economics on behalf of the National Landlords Association (NLA), also forecasts a 595 reduction in housing available to tenants on housing benefit or Universal Credit, and a potential increase in rents for 135.

But it suggests a possible solution, namely a reformed court process that made dealing with Section 8 cases faster and cheaper could nullify the removal of Section 21 for many landlords.

However, the PRS would still see a likely reduction of between 180,000 to 390,000 homes, between 130,000 and 300,000 fewer homes available to benefit claimants, and rent increases for between 110,000 to 240,000 properties.

In an accompanying report by the NLA, case studies of members’ experiences with both Section 21 and Section 8 outline the problems many landlords currently face with both processes, including losses in the tens of thousands of pounds.

‘The Government has clearly failed to recognise the realities of the private rented sector by proposing the abolition of Section 21,’ said Chris Norris, director of policy and practice at the NLA.

‘Any Government which thinks it appropriate to risk the loss of nearly one million rental homes at a time of housing crisis needs to reassess its priorities as a matter of urgency,’ he explained.

‘Rather than playing to the gallery, the Government should be looking to support and incentivise good landlords to remain active and provide homes to those who need them, rather than making it harder and causing these landlords to exit the market,’ he added.