Labour sets out stall to scrap Section 21 and bring in rent controls

If it comes to power, Labour will scrap Section 21, give local authorities in cities the power to introduce rent controls, and back ‘renters unions’ to the tune of £20m – a move which critics are describing as buying the votes of Generation Rent.

Shadow housing minister John Healey unveiled the proposals at the Labour party conference.

The so-called ‘no fault’ ground, Section 21, which enables a landlord to claim possession of their property, has been part of the Housing Act since 1988.

Its scrapping would follow the example already enacted in Scotland.

While landlord bodies widely credit the introduction of Section 21 as making the private rented sector attractive to investors, other organisations say it is the biggest single cause of homelessness.

Research by the Joseph Rowntree Foundation and Cambridge Centre for Housing and Planning Research found 80% of evictions were the result of Section 21.

Labour would also introduce three-year tenancies, and ban letting agent fees.

Healey said: “Tenants who rent from private landlords have been hit hard by the housing crisis.

“Labour’s commitment is clear: we’ll give renters new rights to control rental costs, improve conditions and increase security.

“Renters’ unions help put power in the hands of tenants.

“And the next Labour government will fund set-up costs for these unions across the country to support renters to defend their rights, and make the housing market fairer.”

David Smith, policy director for the Residential Landlords Association, criticised the proposals.

He said: “Many landlords resort to Section 21 notices because the alternative procedures take too long to process through the courts.

“The vast majority of tenants enjoy good relations with their landlords.

“In the minority of cases where things go wrong, however, landlords need the confidence that they can regain possession of a property swiftly when faced with tenants not paying their rent or committing anti-social behaviour.”

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43 Comments

  1. ArthurHouse02

    Balance, its all about balance. They are right, tenants need more security and agents that only let tenants sign up to 6 month tenancies arent helping the situation and longer tenancies in most situations should be an issue. But the balance has to be protection for a landlord whose tenant decides not to pay their rent, surely a landlord isnt then stuck with the tenant for 3 years before they can do anything.

     

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    1. 1bobbit1

      I’m not in favour of this but surely that’s what the section 8 notice is for…

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      1. James

        Do you really think the Courts will be able to deal with the increased volume of S8 cases if S21 is scrapped? ……Not a cat in hell’s chance i’m afraid.

        Maybe accelerated possession procedure for S8 that doesn’t require a court hearing is what’s required?

        Bottom line is for S21’s to be banned we will need a whole new Housing Act.

         

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      2. CountryLass

        The problem with S8 is that it can take 9 months to get it through the Court and to get the bailiffs round. And as Councils are telling Tenants to ignore it until the Agent gets a court warrant, it’s a nightmare.

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  2. JonnyBanana43

    Socialism doesn’t work.

    Landlords and tenants need flexibility in a free market.

    Fixing rents and penalising landlords is not helpful to the housing market.

    Three year tenancies…madness! More protection, maybe, but three years….! Come on! 

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    1. dutchy

      Socialism bailed out the banks and the housing market in 2008 and gave us ZIRP/QE and all manner of taxpayer subsidized back door bail outs for borrowers eg HTB1,HTB 2, Fundling for lending etc etc

      I somehow doubt you were squealing about it back then?

       

      I agree a regulated free market is the best solution and I don’t believe that’s a contradication in terms.

       

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  3. hertsagent13

    I’ve spoken to lots of my tenants and none want 3 year tenancies, they like the flexibility of being able to move if required. Also I wonder as a percentage how many tenancies are ended by the landlord and how many by tenants?  In my experience it’s about 95% of tenancies ended by tenants. If this is the case across the country section 21 is not an issue!

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    1. dutchy

      Horses for courses isn’t it?
      Being tied for 3 years is a bad thing on both sides but regular break clauses could be mutually beneficial in terms of non payers or Landlords non performance

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  4. JonnyBanana43

    Socialism doesn’t work.

    Landlords and tenants need flexibility in a free market.

    Fixing rents and penalising landlords is not helpful to the housing market.

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  5. frostieclaret87

    First class idiots. This is one of the best ways to destroy the BTL sector and cause even more damage to the rental sector as landlords bail out. God help us if these clowns are  ever trusted with the keys to No 10!

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    1. Eyereaderturnedposter12

      Agreed, however it would be wise to consider the ‘other side of the coin”…being that the dismantling of the PRS (ergo, and by its very nature the BTL market) is a deliberate strategy to place housing control in the hands of corporate/”Big Business” interests (evidenced by the ever growing ranks of insurance/financial/investment firms placing their clients’ money in ever more grand BTR projects), as well as the social sector…

      Labour, Tory or my cousin’s pet otter…Whomsoever finds themselves residing in No.10 (and No.11) will undoubtedly follow the money (and that isn’t from the likes of you and I)…

      IMHO, the simple fact is, that for a majority of the general public (who couldnt care less, with the exception of the prospect of not having to pay for a service[!]), the current woes of the PRS and Agency are a ”sideshow” to the underlying narrative of reallocating wealth into the hands of an ever shrinking ‘super-elite’.

      Happy Tuesday, and have a successful day!

       

       

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      1. Mark Connelly

        Absolutely correct observation in regard to the Tories. Started by Osborne and continued with Hammond. Labour it’s just sound bites. No grand plan and no consideration of the consequences.

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        1. CountryLass

          To be honest, I don’t actually trust any policitians. None of them seem to have a clue, they all just make promises to get votes, regardless of the consequences. They always argue the opposite of what the other party are saying, and the effect of that is that the country is a shambles.
          I really wish that there was another option, but Labour helped get us in to this mess, Tories seem to be helping get us back on track but I’m not convinced with the areas of the cuts and some of their policies, and Lib Dem is basically a wasted vote. UKIP seem to be a bunch of xenophobic racists from what I have seen, and don’t seem to have a shot anyway.

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    2. dutchy

      ‘This is one of the best ways to destroy the BTL sector and cause even more damage to the rental sector as landlords bail out.’
       
      Landlords bail out,prices drop,FTB’s and assorted youngsters can afford a house.What’s not to love?

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      1. Gromit

        You haven’t really thought through the consequences of such a scenario – are you a politician?

        How many would go into negative equity? (Many recently bought by FTBs who you seem to want to help).

        Who will buy in a falling market? How many Lenders will lend in a falling market? And how much bigger will the deposits need to be?

        Where will the displaced tenants live? Given there will be far fewer properties to rent. You seem happy for more affluent FTBs to benefit at the expense of poorer tenants.

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        1. dutchy

          Yawn.

          At some point housing will revert to 3 or 4 times local salary multiples and then we’ll have another round of equity raising by the banks….….again.

          In answer to your several questions

          1) lenders will lend even less in a downturn-that’s how FRB works.Which means prices will drop even faster and for those who wait,they’ll get a place to live for a sensible multiple of their salary.

          2) Some would be in negative equity.The problem is that the presumption in your point is that the housing market should be a win only market.

          That’s just not how life works.You pays yer money,you takes yer chance.

          3) Deposits requirements may well rise which would reinforce the downward price spiral.

          4) displaced tenants will have a tough time as we transition back to the equilibrium level for house prices salaries and banks/capital ratio’s.

          5) as for poorer tenants,I wish Letting agents had shown some compassion for them over the last few years while many have been paying £400+ to the likes of Countrywide for a tenancy application.

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          1. natural_selection

            From someone who actually works in the industry and see’s the tenants reference forms before they move in, I can confirm no matter how much house prices fall, many tenants will probably never be able to rent, there are many more who choose to rent for lifestyle (work, flexibility etc). You seem happy to throw these people on to the fire too just to achieve your ideological views. The PRS is just that, the PRIVATE market, many have been caught up in the PRS because subsequent governments of both colours failed to build sufficient social housing for the poorest in society and were happy for the PRS to be part of the solution. Overburdened with demand exceeding supply, yes prices of rent and fees skyrocketed, not great but that’s how basic economics works I’m afraid. The funny thing is that the most likely outcome of a dramatic house price drop and subsequent housing crisis will be mass corporate / pseudo housing assocition buy up. Recent articles and reports in The Guardian and by Shelter have exposed many housing associations are run by fat cat directors earning sums letting agents could only dream of, whilst the English Housing Survey report 2016/2017 showed satisfaction levels of tenants in social housing is LOWER than the PRS! Take all the time you need to think about that.

            To conclude, imo politicians need to stop attacking the PRS and start building more genuine social housing along with more schemes to help FTBs & key workers.

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            1. dutchy

              It’s funny how both of these repsonses seem to forget that both QE and Zirp are a direct subsidy to Landlords and homeowners by taxpayers.

              You’re squealing for less intervention in the hosuing market but are happy to let the boE have your back on interest rates.

              Strange.

              Like I said,you want a win only housing market,that’s jsut not how life works.

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          2. CountryLass

            And for those who purchased a home, but now need to move for work or a growing family, your answer is? Sucks to be you? You’ve saved hard and got on the property ladder, but now because the Government hates Landlords you are going to lose thousands of pounds?And yes, Countrywide charge well over the odds (£600ish in my area) and something needed to be done, but as many others said, a cap was a better idea than a ban. I charge a third of what Countrywide does, which makes me one of the cheaper ones in the area. And a contribution towards the Inventory is included in that, so that as I’m not being paid by one side or the other, it is impartial.The Government needs to take their noses out of Housing, unless they have actually worked in it!

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            1. dutchy

              If the govt had kept it’s nose out of the hosuing market we wouldn’t have had emergency interest rates for ten years and RPI runing at 4%………

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  6. KC54

    So how are we to deal with Right to Rent when someone’s visa has expired and they are in contract?  What about those that only have 9 months to remain at the start of a tenancy?  Does that mean they will be discriminated against?  The Home Office advice for any overstayers is to issue a S21.  What next?   You couldn’t make it up!

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  7. 70GJ

    If there was a nationwide Court that specialised in housing matters meaning you could get a case heard in maybe 3-4 weeks I would be more relaxed. Corbyn’s Labour is like farting in a lift – wrong on so many levels.

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  8. LandlordsandLetting

    When will these ****** idiots ever learn? Labour wants to let local authorities CONTROL rents?

    So, let’s take an example of a 2 bed flat in say Chelsea. The landlord wants to charge £5000 pcm, the market wants him to charge £4000 pcm…and the silly local authority decides that it should be fixed at £1800 pcm. Result? The landlord receives several hundred enquiries, all offering to pay the controlled rent. So how should he decide who to let it to? Maybe the most beautiful? Maybe he could organise a 100 metre sprint? Or a raffle? Maybe the ones who secretly offer to clean his house without charge? Or…maybe there might be other more dubious inducements?

    This is why the Labour Party is what I call the Party of Losers and Luvvies.

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    1. Will

      Around 1980 I was working in SE London and with rent control a 4 storey Georgian Town House and  average condition for the time let at around £10.00-!2.00 per week.  A typical minor roof repair at the time was about £30. This is what the communist party sorry labour party want. At the time there were only a few company lets available as they were not controlled. Labour are even talking about  nationalising companies and not even compensating shared holders. I guess they see themselves as Robin Hoods; I see them as just Hoods! in the American sense.  This is all happening because things have been unfair to the poorer and has split society. Cheap imported labour from eastern europe gave advantage to firms (imropving profits) whilst driving down uk labour rates and significantly put pressure to house the cheap labour providers acting as a double whammy. This  caused the housing crisis.  Councils asset stripped their council housing with thatchers right to buy (buying votes) Labour are now using the same tactics in reverse.  Politicians do not have the country’s good at heart just their own short term interest.  What is sad is that most people do not seem to see this! Guy Fawkes had it right!

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      1. CountryLass

        Meh, not entirely sure that planning to murder (relatively) innocent people was the best plan, but I agree that politicians dont have the Country’s best interest at heart when they get further up the ladder. I think some of the smaller local ones probably do, or did, but then it all goes wrong…

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        1. Will

          OK Guy Fawkes is a bit extreme! Of course I would not advocate violence in reality. Local politicians have virtually no impact. We have an excellent ward councillor but she is controlled by the party leader!

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  9. Jbsparkes74

    Between conservatives and labour. There won’t be anywhere for anyone to rent. All the landlords will have sold. We all appreciate the industry needs tighting up but really, Why use Landlords as a vote winner. The conservatives did that with Brexit and look where that ended up!! Idiots.

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    1. Gromit

      Precisely and £20m of taxpayers money on setting up a renters union wasted to boot.

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  10. Peter Hendry

    It’s a Black Day.
    What they forget is owing to flexible tenure arrangements, the private sector has been able to plug the gap by bringing more rental property onto the market in double quick time.
    Without this, there would have been a supply shortage of astronomical proportions.

    Sadly, they are turning the clock back decades by electing to adopt rent controls.
    Instead of going backwards, we should go forward with new policies like the ones I set out five years ago but these have evidently not even been considered.

    The housing marketplace itself needs upgrading to make finding and securing a roof over one’s head fairer and faster.
    The market has to work out the price levels, not bureaucracy.
     
    See or search under improvethehousingmarket for all the information.

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  11. Property Money Tree

    They are clueless!  It was all a mess from the beginning.  S8 would work if it was a no questions asked fast track eviction procedure.

    Further, it should not be a 2 month yardstick, but a 6 week one.  Once this has been triggered, the Courts should be compelled to grant an eviction, and within 2 weeks at that!  If the landlord can get a non-payer out within 2 months, there will be less use of s21.  I have only ever evicted non rent payers, yet I’ve never used the s8 procedure!

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  12. CountryLass

    Sooo, how is a Landlord supposed to get the property back? With the cuts made to all areas, how with the Court system cope with the thousands of new cases? It already takes months!

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  13. paulelowe

    ‘other organisations say it is the biggest single cause of homelessness’ Shelter I presume? I would have thought that given Section 21 is mostly used when tenants stop paying the rent, given it is more difficult to challenge, then surely tenants not paying their rent is the single biggest cause of homelessness. 

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    1. Gromit

      s.21 is not a cause of homelessness/eviction it is the procedure used to evict tenants who do not pay their rent, trash properties and abuse their neighbours. Scrapping s.21 will not solve those real problems, all that will happen is that another procedure will be used (which will be more time consuming and costly) & which will drive Landlords out of the market and force rents to increase.

      If Labour get into power, and introduce such a bill in Parliament, and before it becomes Law; expect a surge in evictions as Landlords ditch their dodgy tenants and/or exit the market.

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  14. Will

    “Research by the Joseph Rowntree Foundation and Cambridge Centre for Housing and Planning Research found 80% of evictions were the result of Section 21.”  So and 20% are probably due to Section 8.  It is irrelevant  if s21 did not exist the housing Act 1988 would account for most. There would have been fewer in all probability if the Housing Act 1988 had not allowed letting because investors WOULD NOT HAVE BEEN TRICKED INTO INVESTING INTO THE HOUSING MARKET. If its a politician it is self serving.

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  15. TheLettingsGuy

    So 80% of tenancies end with a S21. How many of those were due to rent arrears, anti social behavior, damage to the property or some other breach? The reality is landlords in my neck of the woods don’t ask good tenants to vacate unless they are selling or moving back in.

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  16. Gromit

    For the few rogue Tenants that have lobbied Shelter, Generation Rent et al Labour will penalise the many good Landlords.

     

    Good Tenants don’t get evicted, that’s why average tenancies are in excess of 4years. Rogue tenants do get evicted on a regular basis because, guess what, they are “rogue” tenants, who don’t pay their rent, trash properties and abuse their neighbours.

    So Labour (and the faux Tories) want to pander to the likes of Shelter, Generation Rent et al in the hope of winning a few votes by penalising 2,000,000 Landlords.

    So let’s hope that this policy ends up with their other useless vote grabbing policies like student fees in the bin.

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  17. DarrelKwong43

    If Labour get in, the PRS is dead (although the tories seem to be having a good go)

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    1. Will

      Moreover, many tenants will be evicted and the labour party will demonise landlords for protecting their investment.

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  18. Home Provider

    Ms Renshaw, when you print a press release you should put its contents in inverted commas, and you would be well advised to use the term allegedly in connection with releases put out by left-wing organisations.
     
    Last month you described Shelter as a housing organisation, quoting the press release for their mendacious and hypocritical claims about discrimination by agents against tenants on housing benefit.  
     
    Today you wrote “Research by the Joseph Rowntree Foundation and Cambridge Centre for Housing and Planning Research found 80% of evictions were the result of Section 21.” as if it were a fact.
     
    The report does not say that anywhere.  What the report actually said was,with emphasis added:
     
    “In the past 12 years, the rented sector as a whole, both private and social, has grown by a third, and the number of tenants across both sectors evicted from their homes has grown by a fifth: 7,200 more tenants lost their homes in 2015 than in 2003.
     
    Over this period, social housing landlords evicted more tenants than private sector landlords in every year until 2014. However, the rate of repossession per thousand properties in the social housing sector has been in decline since 2003, while the rate per thousand in the private rented sector has been increasing, so the rate of repossessions in the two sectors is now similar, at 4.7 tenants per thousand per year.
     
    Over four-fifths (83%) of the increase in repossessions in recent years is represented by the increasing use of ‘no fault’ evictions, using Section 21, but the use of Section 21 is highly concentrated geographically”.
     
    This apparently enormous increase equated to 0.17% of the number of dwellings that there were in the PRS in 2015. or 1.7 per thousand dwellings!
     
    The thrust of the report was that freezing or cutting benefits was the cause of increasing homelessness.   In its press release Campbell Robb, Chief Executive of JRF (and previously anti-landlord CEO of Shelter) and Anne Baxendale, director of campaigns and policy at Shelter were quoted as demanding that the government lift/abandon the freeze on Housing Benefit.  They did not mention S 21.
     
    However, one of the authors diluted the message and hijacked it into feeble anti-S 21 propaganda for Generation Rent.
     
    https://www.property118.com/poverty-evictions-forced-moves/ 

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  19. andrewgregory24

    More verbal diarrhoea from idiot ministers who haven’t got a clue about anything property related themselves! Can we have a Housing Minister and Shadow ministers with some actual housing experience please? I would suggest that an accepted criteria should be that they should at least be RICS accredited.

    Noting a few other comments, I have to agree that the current system is not perfect but nor does it need wholesale change… The addition of the option for a longer AST is a fair suggestion that would reduce cost for both Landlord and Tenant but a landlord who has made a substantial investment to provide a housing provision to help with the housing crisis ‘made deeper by successive governments’ deserves some protection from rogue / bad tenants. Subsequently the rules associated with an AST which allow that a landlord can regain control of his/her property should the situation arise!

     

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  20. PossessionFriendUK39

    The Tenants WON’T be bound by 3 years, – that’s part of the Unfairness, Its only One -sided on Landlords that can’t get their property back  !

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  21. TOZ4

    this is all about the social housing situation. Introducing these restrictions will make matters worse for local clouncils. Idiots!!!!!!

     

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  22. IWONDER36

    They can false-promise tenants new rights all day long just to win votes. Surely tenants with any sense can see that these rushed-through, ill-conceived, knee-jerk policies are wrecking the PRS? They won’t have any need to use their new rights if there are no homes to rent!

    Labour explain to me how a portfolio landlord who provides good quality homes to good tenants is responsible for homelessness?

    A S21 may be issued to a tenant who is always behind with, or has no intention of paying rent, abuses the property (landlords asset) or is a constant nuisance to the community?

    What happened to taking responsibility for your own actions? (If you are served a section 21, first look at your own actions).

    It’s these silly comments by headline grabbing buffoons that have dragged politics into the gutter!

    You want to blame homelessness on someone, don’t blame those providing homes, or those working in the sector which provides homes!!

    Blame successive housing ministers, Shelter, poor investment, bad politics, appalling drug and border control, Brexit wars, care in the community, lack of empathy, greed, mass immigration, alcohol abuse, child abuse, prostitution, trafficking, mental health, poor education, welfare reforms, welfare delays, HB delays, UC payments to those unable to cope with it! I could go on and and on!

    I hardly think I need a Crystal ball to envisage a Corbyn, Abbott future where we are ****** homeless!

     

     

     

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