Banning no-fault eviction is a good thing?

We are told today by the Renter Reform Coalition that 700,000 private renting households have received a S21 no-fault eviction notice since the pandemic began which could affect 1.6 million men, women and children given 2.3 is the average household size.  It is an outrage.  Yet nobody it seems has bothered to ask how many housing association households and council LHC tenants have also been served the same Section 21 no-fault eviction notices! 

Renter Reform Coalition members

We know from official data that Starter Tenancies are used for more than 70% of all new housing association tenancies and they are the exact same Assured Shorthold Tenancy as used in the private rented sector and can be ended by the exact same section 21 no-fault eviction notice.  That is just as much an outrage and in my view an even greater outrage since nobody has even bothered to ask or find out how many HA renting households are evicted in this way. 

Shelter has a page on their website which deals with HA ‘starter tenancies’ and as you can see a housing association can operate no-fault eviction in the exact same way as a private landlord via a Section 21 Notice.

Yet not one of the Renter Reform Coalition members has even bothered to ask how many no-fault eviction section 21 Notices have been issued by housing associations.

Additionally almost every local authority across England owns their own private landlord company called a Local Housing Company (LHC) and all of these are restricted to the Assured Shorthold Tenancy because they are private landlords and they too issue Section 21 no-fault eviction … yet not a peep from the Renters Reform Alliance

Insert LHC definition

Social Housing Green Paper (SHGP) official definition

If a no-fault eviction is an outrage, is amoral, is offensive then it is all of these things regardless of which type of landlord uses no-fault eviction and ANY landlord that does is the proverbial bastard.

The populist clamour to ban no fault evictions is incredibly ill-considered and is the same populist nonsense that said Brexit will give £350m more per week to the NHS.  It is very much a politically-driven agenda that deals with theory which sounds so right and so populist yet does not give any consideration to practical impacts and how it can make renting an even worse reality after any such ban.

The Banning of No-Fault Eviction (NFE) is a good thing?

No policy acts in a vacuum and the banning of NFE will have far more damaging and dangerous consequences than keeping it especially in terms of homelessness.  In simple yet valid terms, making it more difficult and more time-consuming to evict means it will impose a greater cost of eviction on ALL landlords – which on the face of it I have no objection to.

However, what it undoubtedly and inevitably means is that ALL landlords will undoubtedly and inevitably become more risk averse as to whom they will accommodate in the first place.  This is hugely problematic and best explained in terms of single homelessness as in England social landlords only offer up 13,000 rehousing properties to single homeless persons each year when England has and creates at least 150,000 single homeless persons each and every year. 

England is reliant on the private landlord to rehouse 137,000 of this minimum 150,000 and over 90% of its single homeless persons each and every year.  The banning of no-fault eviction means private landlords will take flight from rehousing the single homeless cohorts it currently does as the single homeless prospective tenant become a higher risk and higher cost cohort due to the banning of NFE and there is no extra financial reward for rehousing them.

Every company in every sector assesses risk versus reward. If you are a higher risk customer then you are charged a higher cost for that provider perceived risk.  An insurance company is a simple analogy that we all know so if you want to ski or snowboard then your insurance premium is a much higher cost than somebody who wants to merely holiday abroad by soaking up the sun.  That same principle applies with NFE to prospective tenants. 

ALL single homeless and even family homeless households are more likely to be evicted again is how ALL landlords perceive risk of tenancy failure yet there is no extra they can charge the homeless household in rent to mitigate that higher risk.  There is no industry that will take a higher risk for no higher reward yet that is what the banning of no-fault eviction means for the landlord in the housing industry.

Return to the facts above and do some simple arithmetic and the NFE banning and how it will affect single homelessness is horrific.  To keep the numbers simple let’s say private landlords rehouse 130,000 single homeless per year and social landlords rehouse 13,000 per year.

IF PRS landlords take just 10% flight from this tenant market they rehouse 13,000 fewer single homeless persons per year which means SRS landlords will have to increase the number they rehouse by 13,000 for a 100% increase by rehousing 26,000 in total – the usual 13,000 plus the 13,000 the PRS will no longer rehouse.

If PRS landlords take 20% flight from rehousing single homeless persons then social landlords will need to TREBLE the number they rehouse (from 13,000 to 39,000) and if PRS landlords take 30% flight from rehousing single homeless persons then social landlords will need to QUADRUPLE the number they rehouse from 13,000 to 52,000 per year.

BECAUSE social landlords do not have the capacity to even double the number of single homeless households they currently rehouse it means single people in homeless hostels and domestic abuse refuges have to stay there longer which means more rough sleepers not able to get into hostels and many more domestic abuse victims not able to get into refuge.

The homeless and domestic abuse implications from banning no-fault evictions by private landlords, housing associations and council-owned local housing companies is horrific and the NFE ban does not just adversely impact here but on a much wider scale. 

EVERY landlord will become far more risk averse and far more circumspect for mainstream general needs tenants.  The risk factors of it being harder, lengthier and more costly to evict means every prospective renter will be subject to far greater scrutiny when it comes to all allocation of every rented property.  Those perceived increased risks were known before the pandemic and are much more increased due to the pandemic.  Three million more on Universal Credit and massively reduced job security for millions is what the pandemic has seen. 

For example, a prospective tenant working full time in the hospitality industry or retail was a lowish risk of arrears before the pandemic yet now and in the future has become a higher perceived risk of arrears to landlords.  Look a bit closer and all the high rent areas where housing benefit comes nowhere near the rent charged and all prospective tenants in low-paying employment become a higher risk to arrears as their low paying jobs are significantly more precarious as a result of the pandemic. 

If many office workers retaining employment begin to start working from home 2 days per week as a pandemic consequence then they purchase 40% less from a coffee shop, a sandwich shop as they are not at the office workplace and thus all those coffee and sandwich shop businesses have a much greater employee precarity for their low-paid workforce and more likely to fold … which means even full-time but low paid employed renters are a greater risk to the arrears to eviction to homeless pathway and (correctly) perceived that way by landlords.

I could go on but anyone who thinks that landlords, private and social, do and will not factor in all of the pandemic impacts on prospective tenant risk they are living in Cloud Cuckoo Land and so allocation scrutiny for ALL renters by ALL landlords will increase anyway and further increase significantly IF a no-fault eviction ban becomes statute.  No policy change acts in a vacuum and no policy change should be proposed without a full consideration of what changes landlords will make when section 21 ‘no-fault’ eviction is banned.

In short, banning no-fault eviction was always a very dangerous proposal that has become dangerous with the pandemic and its consequences.  To be precise it was always a superficial and moralistic proposal that was ill thought-through and it still is ill thought-through by the Renter Reform Coalition. 

In isolation banning no-fault eviction is similar to the banning of alcohol or Prohibition in the USA a century ago.  It is as superficial as it gets and no thought has gone into what it means or how ‘bad’ tenants are evicted.  Yes, all eviction is abhorrent and it should only be affected with clear fault in a transparent and lawful process – a renter rents their home not just a set of bricks and mortar and having their home taken away from them is repugnant.  Eviction is, however, a necessary evil and a landlord right too. 

Two years ago the Theresa May government announced it was proposing to ban no fault eviction. It took most by surprise yet in the two years since there has never been anything more than this phrase. There has been no concrete proposal, no wording on how it is to be banned, no wording on what will replace the expected section 21 ban – and absolutely no discussion on what the impacts of banning no-fault evition will be or mean. Like any rational humane person I support the removal of the no fault eviction and I know that no fault eviction is truly abhorrent.

Yet I also know that just removing the section 21 notice will undoubtedly lead to far greater rough sleeper numbers and far greater single and family homelessness and far greater domestic abuse and will make it far harder for anyone to rent from a social or private landlord.

Be careful what you wish for

2 thoughts on “Banning no-fault eviction is a good thing?”

  1. All I can say is that looking at this and the above comment from Scotland you all look like you are in the Stone Age. I pity poor tenants subject to this sort of backward and ignorant thinking.

    We may live in a one party state government by cowards and liars (who doesn’t in the UK) but at least we’ve had a mostly sensible discussion about housing and tenants rights.

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  2. I’m afraid your contention that eviction is abhorrent is fundamentally incorrect.

    Eviction is ONLY required because tenants refuse to comply with a NTQ.

    S21 has to be used to terminate an AST whether fixed or rolling.

    This is because if S21 isn’t used to give NTQ then if just a letter is used and the tenant refuses to vacate at the end of the notice period then the LL would need to issue a S21 and give another 2 or however many months the idiot Govt determines will be the S21 notice period.

    The ability to get rid of tenants without needing to give any reason has been the foundation of the PRS since 1997.

    However for most LL if there had been a space on a S21 form to indicate why they are issuing it most LL would have written two simple words

    RENT DEFAULT

    That is why most LL issue S21.

    You are completely wrong when stating S21 is abhorrent.

    It is however abhorrent that LL should be forced to go through lengthy and costly processes to recover their properties from what are mostly feckless rent defaulting tenants.

    Most honest people if they can no longer or choose not to afford a service will give it up except in the case of tenants.

    This is because tenants know the law is 100% on their side.

    You are completely correct in your contentions about increased referencing etc.

    There is no way I would take on anyone in the hospitality industry anymore.

    Anyone working in food production and supermarkets becomes my desired tenant.
    Anyone in public service.
    No way would I let to anyone in the tourism industry.

    As you can well imagine I would not let to anyone who has

    Limited Entitlement to Welfare Assistance

    Or to normal people

    NO DSS!!

    There will be a natural decline in the PRS as the pool of suitable tenants reduce.

    Now this may seem counterintuitive but if S21 was retained in cases only of rent default with all other reasons using S8 then you would find LL more willing to take on the riskier tenants.

    However a major change would be required in the S21 process.

    This would be no need to attend County Court or issue any PO.

    All that would be required is a S21 issued 2 months before removal by the LL with Police assistance if necessary.
    No bailiffs etc

    Such a revised S21 notice to only be enforceable 14 days after the 2 month notice of 2 months of arrears.

    So where rent is paid monthly in advance that is 45 days from 1st rent default to removal by Police.

    LL would then be far more willing to expose themselves to renting to riskier groups.

    I agree that a revised S8 process should be used for all other eviction reasons.

    Indeed I would remove the S8 eviction process for rent arrears.

    Rent arrears would be dealt with solely by a revised S21 process which would only be used for rent arrears.

    I would also have it that providing ALL the rent arrears were paid on the 14th day after 32 days then the LL would be permitted to remove.

    But that those funds would need to cleared funds on the 14th day.

    Invariably that will mean cash or a faster payment.

    Now you and I know that this or any other future Govt will never introduce such sensible legislation.

    Which is why everything you have stated about the effects of banning S21 evictions is totally correct.

    As you intimate I will be responding exactly as you have suggested that many LL will.

    The ONLY reason is because of effectively being unable to get rid of RENT DEFAULTING tenants quickly.

    I have never seen the need to remove RENT PAYING tenants!!

    All 5 of my evictions to date were because RENT DEFAULTING tenants refused to vacate at the expiry of S21 notices.

    Now that is truly ABHORRENT!!

    The easier it is made for LL to get rid of RENT DEFAULTING tenants the more likely it is that LL wilm be prepared to risk taking on the lower quality tenants.

    We all know this will never be facilitated by any Govt which is why your predictions will sadly become the case.

    LL aren’t mugs.
    They will sell up as indeed I am no longer prepared to suffer the massive losses that a future eviction process with S21 will impose.

    Most LL can diversify away from AST lettings.

    With the inability to to get rid of rent defaulting tenants quickly the AST business model no longer works especially single household AST.

    More LL will engage in 4 bed HMO not subject to licencing though I understand that idiot councils engage in additional licencing and some like Salford have recently introduced HMO licencing for anymore that 2 unrelated occupiers.

    This will just cause LL to avoid those areas or sell up what stock they have there.

    One thing you haven’t mentioned and that is the numbers of LL that will be selling properties that will cost fortunes to upgrade to EPC C status.

    It just isn’t worth it so those properties will be sold off to up and downsizers.
    FTB WON’T be buying as they would have bought already as there is no shortage nor has there ever been of suitable properties to buy.

    FTB Just can’t afford to buy.

    So unfortunately everything you state will occur.

    The only thing you have wrong is that eviction or NTQ is not abhorrent.
    It is just business.
    Few LL wish to get rid of good rent paying tenants..
    It may interest you to know that annually FECKLESS RENT DEFAULTING TENANTS cause LL over £9 billion in mostly rent default losses.

    Now that is truly ABHORRENT!!

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