Prioritising possession cases - accelerating support for renters’ reform?
Introduction
Throughout 2022 and 2023 the NRLA have been consulting with landlords on, in turn, the White Paper, A Fairer Private Rented Sector and then the proposed legislation which has emerged from that White Paper – the Renters (Reform) Bill.
The NRLA recognise that change is coming: The approach taken by the NRLA has been to seek landlord views on how reforms in the Private Rented Sector (PRS) could better work for landlords. The aim is to secure supply side confidence in the rental market.
Reform of accelerated possession is a clear example of this approach. This blog does not just set out landlord concerns but also identifies how the replacement of Section 21 need not mean the collapse of landlord confidence.
Recent context
The subject of court reform has been in the news lately, with the government confirming that they “will not proceed with the abolition of section 21, until reforms to the justice system are in place.”
This followed on from the Levelling Up, Housing and Communities Committee warning that: “It is not clear whether the government fully appreciates the extent to which an unreformed courts system could undermine its tenancy reforms.”
This announcement was welcomed. It has been long argued that court reform is essential if landlord confidence is to be maintained once Section 21 notices are removed. Implementing legislative reforms such as the Renters (Reform) Bill without parellel court reforms risks damaging landlord confidence still further.
The necessity for court reform is clear: While the majority of initial court hearings are heard within an 8 week period, the median average time between claim and repossession stands at over 22 weeks (2023 Qtr2) - significantly higher than landlord expectations, or the 10-week period the NRLA believe is an acceptable target.
The fieldwork
Most recently, the NRLA commissioned the market research company Potentia Insight to undertake a survey of 1,000 landlords, all letting property in England. These landlords are also not necessarily members of the NRLA (approximately 30% of respondents were members). It is essentially a survey of the "Wider Landlord Community".
Recent consultations on reform of Section 21 have also spanned several quarterly surveys as well as the 2022 consultation on the White Paper. This White Paper consultation attracted over 3,200 landlord views, including many non-members of the NRLA.
What landlords have been telling the NRLA
Chart 1 below is taken from the White Paper consultation. Landlords were asked to respond to the prospect of losing the right to issue a section 21 notice. The consultation asked landlords whether they “could live with” the loss of this tool to retake possession of a property:
Chart 1: Are landlords able to live with the loss of Section 21?
Almost 80% (78.1%), stated they could live with the loss of Section 21. However, for 90% of these landlords, there would need to be sufficient confidence that other reforms and proposals either in the Bill itself or through wider court reforms (these mitigations were specified in the original option response).
This is a consistent finding: In a more recent quarterly consultation over 1,000 landlords gave a broadly similar set of responses – with 76% of landlords (compared with the near-80% above) stating they could continue without Section 21.
The role of prioritisation
One of the problems with persuading landlords the loss of Section 21 can be mitigated through court reforms are the current delays and blockages in the court system. With such acute delays, Section 21 becomes even more essential.
There are several different options to “court reform” (not necessarily mutually exclusive to each other). Examples of court reform include:
- Developing a specific Housing Court system.
- Adoption of Scottish-style tribunals.
- Expanding mediation services.
- Improving access via digitisation.
More recently, the concept of prioritisation has emerged. This can be defined as the ordering of possession cases based on the reason for wanting to take back possession of the property.
Prioritisation became a necessity during Covid-19 when social distancing and sterilisation requirements meant fewer cases could be heard. During this time, anti-social behaviour cases and cases of extreme rent arrears were prioritised above other possession claims based on Section 8 grounds. Section 21 claims were not allocated specific time during this period: instead, judges were expected to deal with accelerated claims during time between hearings.
Prioritisation has now re-emerged as a low cost, easy-to-understand and easy-to-communicate option attracting policy makers.
Prioritisation – the landlord view
The recent survey of wider landlord community focused on the question of prioritisation. Chart 2 below reports the results:
Chart 2: Which cases do landlords wish to see prioritised?
Chart 2 shows there is widespread support for prioritisation of cases. Just 5.2% of landlords thought no cases should be prioritised. Instead, almost one-in-three landlords wished to see priority given to cases of criminal or anti-social behaviour.
Though a different source – an NRLA quarterly consultation asked member-landlords further questions on prioritisation. This consultation shows:
- Over 70% of landlords (72%) who supported prioritisation felt it reasonable that priority cases should be dealt with five weeks faster than a non-prioritised case.
- While almost half (47%) of landlords felt court waiting times - the time between submission and being granted possession - should be less than ten weeks, almost 40% (39%) felt 10-15 weeks was reasonable.
Summary
Section 21 is coming to an end, there is no doubt about this. However, a smooth transition is essential to avoid a supply side crisis.
The NRLA's renters’ reform White Paper consultation (supported by other research) underlines the importance of Section 21 to addressing anti-social behaviour and criminal damage. Acts of ASB and criminal damage also have implications for wider community cohesion and neighbourhood safety. Being unable to take back possession of property with tenants indulging in such behaviour will mean misery for neighbours and the wider community as well as landlords.
Landlords need the assurance court reforms will be sufficient to mitigate the loss of Section 21. Reform of the court system to move these cases through the system as efficiently as possible is needed to give landlords confidence to continue letting property at the same time as Section 21 is removed.
The only stage of a possession claim with a clear timeframe for resolution in the Civil Procedure Rules is the initial hearing. But delays tend to happen after the initial claim hearing, as demonstrated by the pipeline of cases recorded by MoJ. It is therefore likely that any reforms will need to address delays linked to:
- Contested hearings,
- Issuing possession orders and
- Bailiff enforcement.
Effective prioritisation therefore needs to integrate suitable time-based metrics setting out clear targets for each of these stages, not just the initial hearing as at present.
These additional targets are necessary to not only drive improvement but also provide the Government with a method by which to guage when Section 21 may be removed safely.
