They believe the abolition of Section 21, and subsequent expansion of Section 8, could put thousands of tenants at greater risk of receiving a County Court Judgement (CCJ) and ending up homeless as local councils will not be obliged to re-house those with rent arrears judgements.
According to Landlord Action, 95% of Section 8 cases are for mandatory two months’ rent arrears. It is unknown how many Section 21 cases are as a result of rent arrears, but Landlord Action says it is the number one reason landlords serve notice. Data from the Ministry of Justice reports that there were 22,527 accelerated possession claims issued in 2018 (section 21 claims). Of those accelerated possession claims under Section 21, 10,127 resulted in evictions carried out by County Court bailiffs.
Therefore, if landlords are forced to use Section 8 route in the future, thousands more tenants will have rent arrears judgements against them, rather than simply being evicted using Section 21. In addition, more tenants could find themselves with a County Court Judgement (CCJ), which will severely impact their future credit rating.
Paul Shamplina, founder of Landlord Action, explains what this means for tenants: “Local councils will see when a tenant has a rent arrears possession order made against them so will consider that that tenant has made themselves homeless. Therefore, the council will not be obliged to re-house them as they do at present under Section 21 accelerated procedure. If those tenants cannot get accommodation in the private rented sector and cannot be re-housed by the council, what will happen to them?”
In addition, Paul Shamplina is concerned that the figures demonstrate that the number of Section 8 hearings will double because landlords who would previously have used Section 21 will use Section 8. This will double the amount of court time before judges that is required, meaning that a major recruitment drive of judges will be required to deal with the increased number of hearings.
Recently, MHCLG attended Landlord Action offices shadowing the solicitors and paralegal staff to gain a greater understanding of the possession process, and what impact reforms to Section 8 and court processes could have.
Paul concludes: “As well as a rise in homelessness, I believe there will be many other unintended consequences following the abolition of Section 21. These will include, but not be limited to; vulnerable tenants struggling to find accommodation as landlords become more selective; a surge in Section 21 claims as landlords feel increasingly powerless and opt to exit the market.
A shrinking private rented sector will result in further rent rises for tenants. In addition, unless anti-social behaviour is tackled within the reforms, unruly tenants will have the opportunity to remain in properties for longer causing landlords and their neighbours unnecessary stress."
