Housing

No, banning no-fault evictions will not hurt renters – here's proof

The delay to scrapping Section 21 evictions has ignited debate over whether it would be a good idea. But international examples show it protects renters, says think tank the Social Market Foundation

no-fault evictions

While the Renters Reform Bill is set to continue its passage through Parliament, court reforms mean an indefinite delay to the long-promised end to no-fault evictions. Image: Allan Vega / Unsplash

A think tank has accused housing secretary Michael Gove of delaying a ban on no-fault evictions due to false claims that rent reforms would see the private rental sector collapse.

The Renters Reform Bill may have made an appearance in the King’s Speech but its headline change – the long-promised banning of no-fault evictions – is still facing an indefinite delay.

The government bowed to the landlord lobby request to reform courts before delivering on the promise made in the 2019 Conservative manifesto to end no-fault evictions, also known as Section 21 evictions.

No timeframe has been given for court reform and the move has been described as a “flimsy excuse” by Clive Betts, chair of the housing select committee.

Renters who have been waiting more than four years for the government to axe no-fault evictions – which allow landlords to evict a tenant without giving a reason – face an even longer wait.

Landlords and some backbench MPs have warned rent reforms, which include giving tenants more power to keep pets and outlawing bans on renting to families with children or benefit claimants as well as evictions grounds, could see an exodus of landlords.

But Gideon Salutin, a researcher at the Social Market Foundation, said there is no evidence of that in other countries that have banned no-fault evictions.

“The argument that the rental sector will contract under regulations which protect renters is based on faulty economics which ignore the role renters play in the market,” said Salutin.

“There appears to be no correlation between an increase in rental protections and a decrease in rental properties. In fact, the opposite may be true, as stronger protections attract more renters, increasing demand and normalising renting over the long term.”

The Big Issue has called for Rishi Sunak to ensure millions of low-income renters can stay in their homes by banning no-fault evictions through the Renters Reform Bill, unfreezing local housing allowance and reforming universal credit.

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The delay means debate rages on about whether the government’s rent reforms will have a positive or negative impact on renters, who are already facing record-high rents and insecurity.

Ian Narbeth, consultant solicitor at law firm DMH Stallard, said changes could see more tenants struggle to rent due to county court judgements for rent arrears.

“Section 21 was a key factor in creating a residential rental market. Thirty-five years after it was introduced, it is criticised for causing homelessness when the real problem is a shortage of housing,” said Narbeth.

“Landlords who do not need rental income and are fearful they might be stuck with a tenant indefinitely, may withdraw their properties from the market exacerbating the problem.

“The last 12 months have already seen rapidly rising rents because of a shortage of supply as some landlords pull out. The abolition of Section 21 is likely to make this worse and will mean that most renters will face rent increases.”

A government spokesperson said: “Our landmark Renters Reform Bill offers better protections for tenants and gives them greater security to challenge poor conditions in their homes. We are abolishing Section 21 ‘no fault’ evictions and the bill passing through Parliament will see this happen.”

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Has there been a landlord exodus in England?

The private rented sector in England has nearly doubled in size since the early 2000s and has overtaken social housing as the second largest housing tenure, with the 4.6 million households in the sector making up 19% of the housing market.

The most recent English Housing Survey reported that proportion was down from 20% in 2016-17 when there were 4.7 million private renting households. More people moved into home ownership instead – owner occupiers made up 63% of the housing market in 2016-17 but it increased to 64% by 2020-21.

But HMRC figures show that individual landlords are yet to be deterred by rent reforms. The number of individual landlords reporting property income has grown from 2.73m in 2017-18 to 2.82m in 2021-22

Individual landlords raked in income of £48.87bn in 2021-22 – a figure that has grown by 10% since 2017 due to rising rents and more landlords reporting income.

What has happened when other countries banned no-fault evictions?

The Social Market Foundation’s analysis found no-fault eviction bans in other countries have not seen the private rented sector collapse.

Scottish parliament effectively banned no-fault evictions and introduced greater protections for renters in 2017 but its private rented sector grew at a faster rate between March 2018 and March 2020 than England’s, the think tank said.

In 2019, Scotland saw its private rented sector grow at its fastest rate since 2011, while England’s continued to shrink.

no-fault evictions
Research from the Social Market Foundation showed Scotland’s private rental sector has grown since no-fault evictions were banned in 2017. Image: Social Market Foundation

The think tank found other European countries that ban no-fault evictions tend to have a larger private sector – Switzerland, Denmark, Germany, Austria, and the Netherlands all have twice as large a rented sector as the UK while banning no-fault evictions.

no-fault evictions
Private rental sectors in other countries are bigger in size than in England but have regulated to protect renters. Image: Social Market Foundation

Italy, France and Spain have smaller private rented sectors than the UK and allow for no-fault evictions in specified circumstances, such as when the landlord moves into the property.

Ireland, the only large European economy that allows no-fault evictions, has one of the smallest rental sectors, SMF found.

In the United States and Canada, bans on no-fault evictions are down to different states and provinces.

SMF’s Salutin concluded that countries with larger rental sectors are more likely to regulate while tenants’ calls for greater protections grow stronger too.

He argued that England is an outlier in not banning no-fault evictions.

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Salutin added: “What we’re seeing goes against the claims that bans on no-fault evictions limit the role of the rented sector. Rather than decrease its size, it is possible banning the practice leads tenants to feel more confident when renting, increasing demand and taking pressure off the homeownership market.

“At the same time, tenants would be better protected, and more willing to voice complaints about abusive or inefficient landlords who might otherwise retaliate.”

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