Today’s announcement from Liz Truss that the Government is going ahead with a ban on ‘no fault’ evictions is extremely welcome. Though it wasn’t official policy, reports had been circulating that she planned to shelve the plans, which were worked up under Michael Gove when he headed up the Levelling Up / Housing mega-department.
By way of background, Section 21 of the Housing Act 1988 allows landlords to evict tenants without having to establish any fault, hence ‘no fault’ evictions.
It’s worth reflecting on why no fault eviction is such a scourge for tenants. Most obviously, it totally undermines security of tenure if a landlord can simply get rid of you through no fault of your own. Having the Damoclean sword of eviction hanging over your head is no way to live, to say nothing of the stress and inconvenience of potentially having to move to a completely different area in the event you are turfed out.
Unsurprisingly, many tenants are very reluctant to complain to their landlord about shoddy furnishings, damp or necessary repairs, for fear they could be removed from the property at a moment’s notice. Should that happen, the financial ramifications are potentially significant, particularly for those on low wages who may have to stump up the money for a deposit on a new rental. That’s assuming they can even find somewhere to live, of course. In London in particular there is an extremely acute shortage of supply, which is putting already sky-high rents out of the reach of even relatively affluent people.
And that’s just for adults. For children, eviction from rental accommodation could mean moving schools and having to start again in unfamiliar surroundings without friends or teachers. That stress and upheaval is almost bound to affect academic performance, even leaving aside that children in poor families are often arriving at school hungry and struggling to concentrate anyway.
So, there are obvious enough reasons for the Government to ban ‘no fault’ evictions. The supposed rationale for not doing was that ministers wanted to concentrate on other priorities. While I sympathise with the need to put growth front-and-centre, getting the necessary supply-side reforms through Parliament means cultivating as much political capital as possible. Pushing through with a policy that is bound to raise the hackles of both voters and MPs was only going to make that more difficult.
It’s also worth stressing that Gove’s plan wouldn’t have trampled all over landlords’ own property rights. They should still be able to evict tenants if they themselves need to move into the property as is the case with some tenancies in Scotland. They should also obviously still have the right to kick out tenants who fall deeply into rental arrears or damage their property (neither of which would really qualify ‘no fault’ in any case).
We should bear in mind too that tenants are forced to operate in a market that is hugely distorted by the endless policy failures that have contributed to our housing crisis. Given the huge constraints on supply, the scale of rent increases, a degree of protection is a perfectly reasonable compromise. Clearly in the longer term, the solution is to reform our ridiculously restrictive planning system so that we can build new homes and densify the urban areas where people most want to live (which needn’t mean ‘concreting over’ anything, incidentally).
Like all good CapX contributors, I believe strongly in the power of the market to deliver better outcomes. In a world with far more new housing, the options – and the level of rent – for tenants would be much wider, and the incentives for landlords to provide a good service much stronger. As it stands, landlords can get away with pretty much anything and know there will always be a desperate would-be tenant knocking down their door, whatever the price. With all that in mind, it’s right that the Government at least does something to make life easier for tenants, who can’t wait years for a less dysfunctional rental market to emerge.
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