Ability for landlords to reclaim properties ‘crucial to whole lettings industry’March 28, 2019
From Property Industry Eye
High profile landlord Fergus Wilson says that Section 21 – the ability of the landlord to reclaim possession of their property without having to state a reason – underpins the entire letting industry.
Political factions oppose the so-called no-fault eviction, which has already been banned in Scotland. The Labour party says it will abolish it in England.
Wilson, who has put the final part of his property portfolio on the market and is retiring from the industry, said that Section 21 is absolutely essential if the private rented sector is to continue.
It dates back to 1989 when the Government introduced the Assured Shorthold Tenancy in an attempt to resolve a shortage of rental properties.
Wilson said: “I had the first AST in the country on January 15 that year.
“Before that, whether the tenancies available were statutory, regulated, assured or whatever label, the landlord could not recover possession and effectively the tenant had a lifetime tenancy.
“Lenders did not wish to lend. Landlords did not wish to be landlords.”
Wilson said that without Section 21, no lender would lend money, and there would be a mass exodus of landlords: “Then, where would the private tenant be?”
Of housing benefits tenants, Wilson said that landlords make choices based on sound economic factors. In other words, the landlord did not wish to underwrite the tenancy should the tenant default, and the lender is insistent that the landlord does not do that.
While there are rent guarantee products, insurers also have to be sure that there will not be a tenant that defaults.
Wilson said: “The issue becomes, who underwrites the tenant? The Government is free to do so.”
Wilson said that currently demand outstrips rental supply and that while a popular solution is to build more houses, in reality, this would take 20 years.
Wilson and his wife Judith built up a property empire of 1,000 rental homes, but have sold the bulk of it.
This week he announced that he has a preferred buyer for the 300 properties remaining in his portfolio in Kent – Golding Homes. He said he had had 20 approaches, but that social housing provider Golding Homes has confirmed it will not evict the tenants.
It has also emerged this week that Wilson is suing Kent Police for £1m after claiming he was wrongly arrested and put in a cell before being bailed for four months.
The charges were then dropped.
A tenant had alleged that he had made advances to her, and demanded sexual favours from other tenants.
Wilson vehemently denied both charges. His claim appears likely to go before a county court this autumn.
A spokesperson for Kent Police confirmed having received a compensation claim from Wilson, saying: “This matter is ongoing and therefore we are unable to make further comment at this time.”