High profile landlord Fergus Wilson says that Section 21 – the ability of the landlord to reclaim possession of their property without having to state a reason – underpins the entire letting industry.
Political factions oppose the so-called no-fault eviction, which has already been banned in Scotland. The Labour party says it will abolish it in England.
Wilson, who has put the final part of his property portfolio on the market and is retiring from the industry, said that Section 21 is absolutely essential if the private rented sector is to continue.
It dates back to 1989 when the Government introduced the Assured Shorthold Tenancy in an attempt to resolve a shortage of rental properties.
Wilson said: “I had the first AST in the country on January 15 that year.
“Before that, whether the tenancies available were statutory, regulated, assured or whatever label, the landlord could not recover possession and effectively the tenant had a lifetime tenancy.
“Lenders did not wish to lend. Landlords did not wish to be landlords.”
Wilson said that without Section 21, no lender would lend money, and there would be a mass exodus of landlords: “Then, where would the private tenant be?”
Of housing benefits tenants, Wilson said that landlords make choices based on sound economic factors. In other words, the landlord did not wish to underwrite the tenancy should the tenant default, and the lender is insistent that the landlord does not do that.
While there are rent guarantee products, insurers also have to be sure that there will not be a tenant that defaults.
Wilson said: “The issue becomes, who underwrites the tenant? The Government is free to do so.”
Wilson said that currently demand outstrips rental supply and that while a popular solution is to build more houses, in reality, this would take 20 years.
Wilson and his wife Judith built up a property empire of 1,000 rental homes, but have sold the bulk of it.
This week he announced that he has a preferred buyer for the 300 properties remaining in his portfolio in Kent – Golding Homes. He said he had had 20 approaches, but that social housing provider Golding Homes has confirmed it will not evict the tenants.
It has also emerged this week that Wilson is suing Kent Police for £1m after claiming he was wrongly arrested and put in a cell before being bailed for four months.
The charges were then dropped.
A tenant had alleged that he had made advances to her, and demanded sexual favours from other tenants.
Wilson vehemently denied both charges. His claim appears likely to go before a county court this autumn.
A spokesperson for Kent Police confirmed having received a compensation claim from Wilson, saying: “This matter is ongoing and therefore we are unable to make further comment at this time.”
The loss of Section 21 will kill the PRS dead. There is nothing in it for the landlord to continue with “full risk” and will sell up.
Let is be a warning for PRS, open your eyes and look at what has been done to the industry over the last decade. All was muted as going to happen long ago and it has slowly been implemented. The two left are protected tenancies and withdrawal of Section 21. The country is going to face a mass exodus of rental property, it has already started but will quickly accelerate once the public get wind.
I will argue that Section 21 is not over abused, what landlords kicks out a good tenant?
What are you going to tell your landlord/prospective landlords when they seek your advice?
As soon as they confirm Section 21 is going to be abolished, we shall sell all our own rental properties.
The state is not going to build an adequate supply of new housing. They are taking over the PRS through the back door to house people they should be housing, but at your cost.
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Spot on.
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For those who want or need long term tenancies you have Assurred Tenancies. The problems is no one wants to invest in property offering Assurred tenancies ( I wonder why?). For all those policitians that have difficulties is the use of the English language “Shorthold” in Assurred Shorthold Tenancy means “SHORTHOLD” and was introduce to fulfil a certain place in the market. Now ROGUE politicians want to change the use of the language after they have TRICKED & DECIEVED people (THE PUBLIC) into investing billions of pounds.
It is unfortunate that Fergus Wilson, what ever you may think of him, has an image problem and anything he says will be used against the property profession. Whether he is right or wrong in his views.
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In theory section 21 is not required…any tenancy breach go section 8 (less compliance issues) or go ground 1 for those tenancies with an accidental landlord who needs to move in. section 21 service has become so onerous in terms of compliance there is a good chance that a significant minority served by agents and landlords are invalid
Gov just need to make eviction much quicker for tenants breaching the tenancy and I think I would support the abolishment of a section 21 notice
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Personally I would not agree. The reason being that many people invested on the basis they could liquidate their investment at a point of their choosing. S8 would not achieve this. Millions of landlords would have been tricked or conned into an unsuitable investment. If it were a bank it would be another ppi outrage but politically generated.
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Agreed, Section 8 is for default by the tenant and is no guarantee for the majority of it, that you will get a possession order when a tenant does misbehave. Rent arrears is the exception. The use of “Hazard Notices” is such an easy stitch up of the landlord to prevent action and was sold to PRS as to improve standards, while they knew only to well tenants could take advantage of the poorly implemented policy. The slightest draughty window seal is now classed as a Hazard 2 and the list is getting longer and longer. “Shorthold” is as it says, not a guarantee and why Labour have always wanted it scrapped and will if they get into real power.
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Shame that this decision making is political not what’s best for the sector or market .. the government will do whatever they think will win the all important generation rent vote to stay in power regardless of the consequences
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Political decision making is not always in public interest.
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.. The ability of Landlords to reclaim properties is being and has been diminishing for many years due to the insufficient housing provision. As WoodenTop says, its the Govt securing Housing by the back door. Every piece of legislation implemented has an “anti-use of Sec 21 attached ” even the forthcoming tenant fee-ban. There are serious Possession problems for landlords in many areas. I’ve been highlighting one of them, the Fitness for Human Habitation Act. See a letter of mine to one property blog, below ; I have singularly been in dialogue with landlord – property blogs, originally the sole and first voice to speak up about concerns for abuse of this legislation. This has not gone down too well with the author, Mr Giles Peaker. I have been blunt about the massive campaign in existence by All legal aid solicitors about the general state of reduced funding. In particular, I have pointed out that the author is a legal aid solicitor and that FFHH cases will by the nature of their potential for injury to Health ( HHSRS comparators, more of that shortly ) attract a Legal Aid solicitor. My concern has been that tenants who find themselves subject to Posesssion proceedings, will soon ‘cotton-on’ to a potential avenue for what I call, ” Retaliatory Defence ” A complaint about mold – mildew, portrayed as signs of damp could be brought to a willing legal aid solicitor ( not many will turn down a case, and they’ll get paid, win or loose ) Meanwhile any pending Possession case is likely to be adjourned pending the outcome of a civil claim. Mr Peaker disputes this is likely or a course the courts will take. I would like to think and hope he is right but have serious concerns he may not be. Look at the existing position where a Tenant is being taken to court for Possession following rent arrears. In such cases where there is a deposit contravention, the courts have shown a repeated willingness to off-set the civil award for failure to protect a deposit, against the rent outstanding. Given this, I see no reason why a court wouldn’t adjourn a Possession hearing for rent arrears to allow an award against the landlords to be offset, or at least allow the tenant to use to pay of the rent arrears. Whether the court directly off-set and adjust or award against the Landlord waits to be seen. I do accept that there are a minority of properties that justify measures, but argue that Local Authorities already have the powers to deal with this ( if not the resources ) Outsourcing what should be the prosecution of unfit properties to civil law is in my view an abrogation of enforcement responsibility, facilitated by this legislation. Cheaper for MHCLG to enact Civil law than fund Local Authorities appropriately. Mr Smith points out that FFHH is not synonymous with HHSRS, I beg to differ. Page 5 defines a ‘Prescribed hazard as ‘prescribed by Section 2 of the Housing Act 2004’ ( which is a Category 1, or ‘ 2 ‘ hazard. ) True a court has to consider whether a hazard under HHSRS is such that it convinces the court the property is unfit for habitation. Despite the legislation excepting acts or omission by the lessee ( tenant in plain English, although legislators aren’t capable of writing like that. ) A potential scenario – Tenant dries clothes inside, doesn’t open windows and wants to pay as little to heat the property as possible. ( I’m sure this is ringing bells with landlords ! ) Mold mildew and damp patches, black spores are evident, but doesn’t necessarily bother the tenant at the time – likely knowing their responsible. Tenant falls behind with rent, Landlord serves Sec 8 Notice, tenant indicates a defect. Is it not beyond the realm of any conception that a tenant photographs the black mold spores, goes to their GP, complains of a cough, shows photo and gets sick certificate. ( How hard – easy, is it to get a sick note ! ) Tenant likely not working and on DSS as RLA have campaigned against many landlords wishes and interests to choose to support an organisation like Shelter who campaigns for the Rights of a landlord to choose, to be removed from advertisements, wasting many peoples time. Tenant takes Sec 8 Notice and PCOL to Legal Aid solicitor. Civil claim commenced. The legislation authors believe the courts will treat the FFHH separately, I and many landlords from painful experience are not convinced ( especially not given the example of Deposit contravention above ) Whilst its true that Possession Friend have been the first to raise concerns, we are certainly not the only ones now ! Rentokil in Landlord Today 20/3/19 state 5.8 million renters claim to experience damp and condensation issues and ” 2 Million ! ” believe they have developed an illness as a result of their living conditions. according to research by Rentokil Care. 17% tenants aware of FFHH, but Rentokil rightly state tenants must take responsibility for their living environment. 20% do Not use trickle vents. 38% tenants admit to wearing more clothes instead of turning on heating to save money. 30% tenants regularly dry clothes on radiators with 11% admitting to doing this ‘all the time’. 12% dry clothes in the bathroom, an area where there’s already a lot of moisture. So, when a tenants is confronted with possession proceeding for rent arrears, – Who ( apart from the legislators ) think the tenants are going to own up to this, or what most Landlords from experience believe, that they will deny causing the damp ? ( answers on a postcard ) If Anthony Gold on behalf of the RLA believe its only Landlords that raising this issue, I’d point to Landlord Today, 22/3/19 where Lauren Bryan Chartered Legal Executive of the Dispute resolution dept of Thursfield Solicitors in Birmingham comments, …. the act should prompt landlords to check their properties comply to .. ” avoid unecessary legal action. ” But if a landlord is served with proceedings or the tenant pleads this as a ” DEFENCE to POSSESSION PROCEEDINGS ” [ Helloooo ] they should immediately seek legal advice. Bryan added, ‘ While the law will have some positive outcomes by persuading ( some, my emphasis ) landlords to carry out urgent repairs, it is also just another barrier put before decent landlords and another set of rules to comply with. ‘ Landlords should check their properties and seek legal advice if they feel tenants are trying to take undue advantage of the new laws. ‘ ( something the legislators deny is possible or likely. – Its not like they haven’t got any experience in court with tenants ! ) A landlord isn’t able to win from this legislation, even if the proceedings are successfully defended, as the landlord will have to pay their own solicitors fees, whilst the tenants will be paid by the Tax-payer, a larger proportion of that being landlords since Sec 24 Finance Act ! Solicitors acting for either Landlord or Tenant are going to get paid either way, which brings me back to who wrote this legislation, pro-bono, stangely enough – oh, it was a legal aid solicitor. ( who accuses me of raising this for ‘my own ends’ ! ) Chris Possession Friend.uk
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