Gove’s rental reforms ‘will send disputes to the courts’

Housing Secretary’s plan to scrap ‘no-fault’ evictions forces landlords to take legal action against tenants

MICHAEL GOVE has been accused of pitting landlords against tenants in confrontational court processes as he presses 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.

Margaret Longden, group commercial director of Legal for Landlords, a buy-to-let law firm, said: “If you have to get the police involved, you are forced to make it a more formal process that is absolutely going to be on the tenant’s record. How is that tenant ever going to get another tenancy? Previously, the process was much less confrontational.”

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, warned David Smith, partner at JMW Solicitors. Many landlords have routinely used Section 21 even in cases of tenant

‘If you get the police involved, how is the tenant ever going to get another tenancy?’

wrongdoing because the courts are so slow. In the remaining 50pc, landlords may choose to sell up or just abandon efforts to remove tenants.

Mr Smith said: “If you ask landlords, why do you need Section 21? They will mostly say because they can’t trust the courts to work any other way. That is what it actually comes down to.”

The average wait time between a court claim and repossession in 2022 was nearly 10 months, according to the Ministry of Justice. The Government has said it will digitise parts of the court system to reduce delays.

Tom Darling, campaign manager of the tenants’ rights group Renters’ Reform Coalition, warned: “We are concerned that landlords may continue to use unaffordable rent rises as a de facto no-fault eviction method.”

It is a bit late in the day for a credible rebrand, but it looks like Sir Keir Starmer has finally found his big theme: he wants Labour to become the pro-housing party, capitalising on the Government’s woeful record on this front. More specifically, he has pledged to reinstate mandatory house building targets, which force local authorities to approve more developments than they otherwise would, and to make it easier to build on the bits of the green belt that are not especially green.

This is coming at an opportune moment. Michael Gove yesterday published his Renters’ Reform Bill. This legislation has done little to assuage disquiet over the supply of rental properties, while entrenching concerns that landlords remain the Government’s whipping boy. The Housing Secretary appears more interested in the erosion of property rights than “spreading opportunity across the whole UK” as was promised in the 2019 Tory manifesto.

Politicians have, of course, made similar noises to Sir Keir’s before, only to about-turn as soon as they collide with one of the strongest forces in British politics: Nimbyism. But the Opposition leader’s last-minute rebrand could change political dynamics.

In the late 1990s, England’s housing affordability ratio, which is the ratio of median house prices to median annual gross earnings for full-time employment, stood at just under four. This means that an average household could still buy an average house with under four years’ worth of gross earnings. By the middle of the 2000s, that ratio had climbed to over six, and in 2010, it stood at close to seven. It now stands at over eight. In terms of rent levels, medium-sized English cities such as Oxford and Reading are more expensive than many Western European capitals and economic centres, with London being in a league of its own.

All of this is unsurprising if we look at the market fundamentals. Britain has one of the lowest levels of housing supply in the developed world. If we wanted to catch up with the European average in terms of the number of housing units per 100,000 people, we would have to build 3.5m new homes (and that would not make us good; it would just make us about average).

Immigration is not an excuse. Many other nations have experienced similar or higher levels of population growth, and whatever problems that may cause, runaway housing costs need not be one of them.

Britain is not “overdeveloped”, either. Even in the South East, only about 10pc of the land is developed, in the broadest sense. And no, we don’t need all that land for farming. If we did – why is it that agricultural land is so cheap, while residential land is so expensive?

What really makes Britain’s housing market different from its counterpart in most other countries is a planning system that empowers professional obstructionists and time-rich troublemakers. Ironically, when I surveyed young people on their attitudes to socialism in 2021, it was revealed that 78pc blamed capitalism (not supply-side restrictions) for the housing crisis. Tory housing policy was nudging us along the road to serfdom, yet capitalism was being held responsible for its failures.

This problem has been researched and analysed to death. This year marks the 20th anniversary of the publication of the (interim) Barker Review, which correctly diagnosed the problem, and came up with a broad outline of a workable solution. But it was quickly shelved.

Over the past 13 years, at least three Tory politicians have, in their own ways, tried to sort out Britain’s housing market: Nick Boles, Sajid Javid and Robert Jenrick. They all soon ran into resistance, with the rest of their party eventually forcing their hand. After more than a decade of at least half-heartedly trying to do something about Britain’s housing crisis, Rishi Sunak and Gove have opted for an interesting new approach: don’t even bother trying.

What the Conservatives have done is subsidise the demand side with schemes like Help to Buy (which, in a supply-constrained market, only inflates prices further), while penalising landlords as popular scapegoats. The latest tenancy regulations are an example of this. Ending no-fault evictions may, in the short term, strengthen the position of tenants. But any regulation that makes it costlier and/or riskier to engage in a particular activity will lead to fewer people engaging in that activity. You cannot regulate your way out of a shortage, nor should you try in the hope of favourable headlines.

But given how many politicians have failed to tackle Britain’s housing market – why should things be any different under a Labour government? Would Sir Keir not perform a similar about-turn after a few weeks?

His political incentives may be different. “Yimbyism” (yes in my backyard) has not yet become a political force. There has not been an obvious pro-housing party to scoop up their votes. If Labour mobilises that latent yimby vote, and make it a substantial part of their electoral coalition, then they could deliver on the vow Sir Keir made yesterday. There is no guarantee: Sir Keir has indicated Labour will back the Renters Reform Bill, and many party members support rent controls. But they must realise that while house-building will never be widely popular in Britain, its economic results just might be.

‘You cannot regulate your way out of a shortage’