July 25

Section 8 Warning: Rental Sector Decline


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A well-known legal expert warns that implementing Section 8 eviction powers as outlined in the Renters Reform Bill may result in a substantial downfall of the private rental sector. 

Gina Peters, Head of Landlord and Tenant at Dutton Gregory Solicitors, explains that although Section 8 grounds seem to provide landlords with property repossession rights, the court process may become more time-consuming, potentially taking months instead of weeks due to the requirement for court hearings rather than paper presentations.

“The proposed extension of the notice period for rent arrears from two to four weeks could lead to further delays in rent payments for landlords. Currently, all possession claims should be heard within eight weeks, but this timeline has been affected by the pandemic and remains unresolved in some courts. 

Section 8

With the current court infrastructure already strained, the potential increase in possession hearings due to Section 8 delays may cause a significant decline in the private rental market. This fear is already prompting a surge in Section 21 evictions before the Renters Reform Bill takes effect,” warns Gina Peters, Head of Landlord and Tenant at Dutton Gregory Solicitors.

Dutton Gregory’s Landlord and Tenant department reports an exceptional surge in Section 21 notices issued to tenants following the announcement of the planned reform. In the three months leading to March, no-fault evictions saw a significant 15.8 per cent increase, as per the Ministry of Justice’s recent data.

The firm attributes this rise to the prevailing “fear and uncertainty felt by private landlords.” While Section 21 notices are presently processed through an accelerated possession process without the need for a court hearing, the proposed abolition has left many buy-to-let owners anxious.

Despite the government’s assurance of strengthening Section 8 grounds for property recovery, peace of mind remains elusive for numerous landlords. The situation has prompted an unprecedented number of Section 21 notices being processed, reflecting the concerns prevailing in the private rental sector.

Peters remarked, “The noticeable surge in our workload indicates that numerous private landlords are now opting for Section 21 notices as a precautionary measure.

The prevailing socio-economic situation, marked by soaring inflation, mortgages, and interest rates, has had a cascading impact on the housing stock, leading to increased rental payments.

Consequently, many landlords find themselves in a challenging position; while they desire to retain their property and generate profits, they fear potential months of rental default. As a result, many are choosing to serve a notice promptly, intending to sell their property and exit the rental market while the opportunity remains.”

With a reduced supply of rental properties due to landlords selling, tenant demand is expected to surge, potentially favoring Build to Rent as a dominant force in the rental landscape, according to Peters.

However, Dutton Gregory Solicitors’ Landlord and Tenant team has noticed a decline in private landlords expanding their portfolios this year. Moreover, some tenants receiving Section 21 notices struggle to find affordable alternatives promptly, putting pressure on the courts and increasing costs for landlords.

Addressing court waiting times is crucial to eliminate delays and provide private landlords with greater security. The Renters Reform Bill, set to be enacted no earlier than the end of next year, along with an anticipated General Election in May 2024, has already impacted the rental market dynamics.



Read more Property Investing News HERE


Rental Sector Decline, Renters Reform Bill Impact, Section 21 Surge, Section 8 Warning

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