It’s Another U-Turn As S21 Is To Be Outlawed THIS YEAR..!

We thought we’d kick off this week’s article with something of a good news story and that’s how Paragon have introduced a new fixed rate starting at 3.94%. It’s certainly good news and encourages a higher level of equity along with an improved EPC rating and we have outlined the product below.

The offerings consist of a fresh two-year fixed rate with a 70% loan-to-value (LTV), commencing at 3.94% for environmentally friendly A-C EPC-rated single self-contained properties, 3.99% for those with EPC D-E ratings, and 4.19% for HMOs and multi-unit blocks—tailored for portfolio landlords.

Ok, so onto this news alert and we’re back to Section 21 again as Housing Secretary Michael Gove has told the BBC that no fault evictions will be outlawed before the election in yet another dramatic U-turn.

Section 21 reform is a huge part of the Government’s flagship rental reform bill and you can read about where we are with this in general in Hasan's update here or if you’d like to fill in the detail from the bill, you can do so here.

We know that all landlords need is certainty and the constant changes do not instil confidence at all!

One big problem with the reform is how it’s taking the courts around a year or more to process an eviction and landlords were assured that no reform would take place until the courts were reformed.

This concerning situation will just pile more workload on a broken system. Perhaps the Government is desperate for votes…

When asked about the question of court reform, Gove commented that:

“We will have outlawed it [S21] and we will have put the money into the courts in order to ensure that they can enforce that”. What is interesting however, is when you look at landlord repossession claims we’re yet to be back at pre pandemic levels (yet they are at the highest levels since the pandemic). ONS figures reflect this and they’re certainly interesting to look at!

If you look at the length of time from initial claim to various stages, you will see how it’s been consistently poor since Q4 2018. We are at pre pandemic levels, but the length of time is still far too much considering the costs landlords need to absorb whilst claims are progressed.

The Reform Coalition has argued that the proposed reforms are not strong enough however, and are calling for changes such as the below:

  • Tenants to be given four-month notice periods when being evicted, not the current plan of two months
  • Tenants to be protected from eviction for two years at the start of a tenancy, rather than six months at present
  • The evidential threshold for landlords when they are trying to evict tenants to be raised

We're sure that these points will be given due consideration but do struggle to see point two for example being practical.

What we do understand is Mr Gove’s comment is how the “abuse” of no-fault evictions” needs to be halted. Certainly, we agree that things such as rogue landlords evicting tenants because they raised a maintenance issue is completely unethical however I do wonder quite how common it is!

Let’s see where this one goes as I’m struggling to track the pathway with all of the twists and turns and this is yet another.

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