Section 21 continues to top letting agent concerns

A majority of agents feel unprepared to implement recently announced legislation that will see an end to 'no fault' evictions.

Related topics:  Landlords,  Tenants,  Section 21,  Renters Reform Bill
Property | Reporter
14th June 2023
To Let 722
"These findings show that a lot of concerns and unanswered questions remain for agents and their landlords when it comes to the sweeping changes this legislation will enact"

A new survey of nearly 700 letting agents from across England commissioned by Goodlord has revealed that the abolition of Section 21, set to be introduced when the new Renters (Reform) Bill becomes law, continues to be the leading cause for concern within the industry.

According to the findings, large parts of the sector are also concerned about the move to a system of assured tenancies and the Bill’s potential impact on student lets.

Section 21 tops the list of concerns

When asked which elements of the Renters (Reform) Bill was causing them the most concern, 50% of the 690 letting agents surveyed by Goodlord said the abolition of Section 21 was their primary worry.

The Bill will abolish Section 21, a clause that allows landlords to evict a tenant without providing a reason - commonly dubbed ‘no fault’ evictions. This is causing concern amongst landlords and agents for how they will be able to recover a property in instances such as non-payment of rent or anti-social behaviour.

Fears over Section 8

Next on the list of concerns is the planned reform to Section 8, the new and strengthened regulations designed to allow landlords to evict a tenant after six months if they wish to sell the property, move in themselves or offer the property to a relative.

Despite being designed to provide safeguards to landlords after Section 21 is outlawed, 20% of agents said the Section 8 changes were their biggest worry, indicating that many are unsure whether the provisions will be robust enough.

Move to assured tenancies also generates anxiety

These Section 8 fears are vying for second place as the most commonly cited concern amongst agents, with 20% of those surveyed also saying that the move to assured tenancies - a decision which took many in the industry by surprise - was their biggest concern.

Tenancies are often under 12-month contracts. The move to assured, or ‘periodic’, tenancies will mean that properties will be under rolling monthly contracts, once the Bill has been implemented. Scotland introduced rolling contracts in 2017.

When asked where extra support and guidance would be most helpful, 52% of agents said the move to Assured Tenancies, highlighting a lack of clarity as to what these changes will mean for them in practice.

Confusion over student tenancies

There is also a large amount of confusion and uncertainty around how the Renters (Reform) Bill will affect student tenancies. It’s feared that the move to assured (or ‘periodic’) tenancies won’t be appropriate for student lets, which typically end in line with the academic year when the properties are taken up by a new group of students.

51% of agents said they didn’t yet understand what the reforms would mean for student lets, with only 17% of letting agents, including those specialising in student lets, stating that they understood what the impact would be.

Oliver Sherlock, Director of Insurance at Goodlord, comments:

“Whilst we have now seen the first version of this Bill, it doesn’t mean the industry has full clarity- far from it. These findings show that a lot of concerns and unanswered questions remain for agents and their landlords when it comes to the sweeping changes this legislation will enact.

“For some areas, such as the Bill’s possibly unintended impact on student tenancies, we hope that the Government factors this into the final text of the legislation. In the meantime, it’s clear the industry must start to get to grips with the details of the bill and make meaningful preparations now to ensure their businesses are well prepared for change.”

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