MICHAEL Gove’s Renters Reform Bill will lead to a surge of landlords exiting the market, according to one of Britain’s largest property associations.
The National Association of Property Buyers (NAPB) said Mr Gove’s announcements will also serve to ” “exacerbate the rental shortage”.
Spokesman Jonathan Rolande said: ” This legislation, or even just the fear of it will galvanise many landlords who were on the fence, to sell, coming as it does hot on the heels of interest rate rises, proposed expensive EPC changes, tax changes and a falling sales market. There will be a flurry of evictions pre-sale, which will exacerbate the rental shortage. Many of the properties will sell to owner-occupiers and will leave the rental sector permanently. Those landlords that remain will see their income increase thanks to upward pressure on rents. The shortage of rental stock is about to get much more acute.”
The NAPB is currently the largest property buyer’s organisation in the UK. Its members purchase around £1.5bn of property annually.
The group’s warning comes as Mr Gove was accused of pitting landlords against tenants in confrontational court processes as he pressed ahead with plans to scrap “no-fault” evictions.
In the Commons yesterday, the Housing Secretary outlined plans to abolish Section 21 “no-fault” evictions as part of his Renters Reform Bill. Campaigners warn the move will throw the eviction system into disarray.
Under the new rules, landlords will have to accuse tenants of wrongdoing and win court approval to get them out – replacing a process which could be handled in a less acrimonious way without the involvement of a judge.
It is feared that the changes will make it harder for evicted tenants to find a new property, as well as piling pressure on the courts system. In some cases, landlords would be forced to involve the police – for example, if they need to prove that a tenant is antisocial.
Currently, landlords have two ways to reclaim possession of their properties. They can go through the courts to prove tenant wrongdoing using a Section 8 notice, or they can bypass the courts by using a Section 21 “no-fault” notice. Under the new system, landlords will have to go through the courts unless they meet certain exempting criteria, such as wanting to sell.
Mr Gove said the Bill will offer a “New Deal” to renters “with quality, affordability and fairness at its heart”.
However, Clive Betts, a Labour MP and chairman of the housing select committee, warned that the increased burden on the court system means conflicts will drag on painfully.
Mr Betts said: “I am worried. On both sides, there are situations when swift resolution to a problem is necessary. They should all be in court within a matter of very few weeks, not several months, and I have no confidence that the proposals can deliver that.”
More than half of the evictions previously carried out using Section 21 will now be diverted to the courts, it is feared.
