Here's another reason to boo rising house prices

I bet you thought rising house prices just made it more difficult for you to ever own your own home.

Well, it's even worse than that. 

Rising house prices increase your risk of being evicted. 

Already angry? Jump straight to our campaign page.

House prices fell during the 2009-2010 recession then have been on an upward trajectory since then.

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Private landlords are able to evict tenants without needing to give a reason, using Section 21 of the 1988 Housing Act. Tenants served with a valid Section 21 notice to quit have no defence and will very often move out within the two-month notice period without the landlord taking further action.

Analysis that we have done with David Adler, an Oxford academic, shows that the level of these evictions (recorded by the Ministry of Justice as "accelerated" evictions) followed house prices pretty closely. 

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David attributes this process to investor confidence. If prices are rising, then landlords are more likely to decide to sell and evict their tenants in order to do so. When prices are falling, landlords are less likely to try to sell and more likely to retain their rent-paying tenants. There is a consequent downward pressure on rent levels. This pressure reverses following an increase in evictions.

The study compared evictions data with the Office for National Statistics’ house price index and index of private rented housing prices. 

Both house prices and evictions began to fall in the first quarter of 2008. The rental index lagged behind, falling only in the second quarter of 2009 — more than a year later. House prices began their ascent first, in the second quarter of 2009. Evictions then followed, picking up again in the fourth quarter of 2009. And again, the rental index lagged behind — bouncing back only in the third quarter of 2010.

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Private tenants in England are now 2.5 times more likely to be evicted without their landlord giving a reason than they were during the 2009 recession.

The total number of accelerated evictions in 2015 was 16,441 – approximately 39 tenants in every 10,000 were evicted using the no-fault process, and went all the way through the courts. This compares with 4,963 such cases in 2009 – approximately 15 tenants in every 10,000. Many more affected tenants move out without going through court, knowing that they have no defence, but the government does not record these figures. Generation Rent polling has found that 1 in 4 private renters have experienced an unwanted move.

And tenants are not to blame: in the same period, rent arrears (recorded by LSL Property Services) have actually fallen.

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David compared evictions and house price data at a local authority level over 10 years – over 13,000 observations in total – and found a highly significant relationship between house prices and eviction rates. A 10 percent increase in house prices is on average associated with an increase in evictions of over 60 per cent in a given local authority.

The increase in no-fault evictions comes at a time when increasing numbers of families have no option but to rent in the private sector. According to the English Housing Survey, 1.5m private rented properties are home to children – 36% of the sector.

A tenant can pay the rent on time every month and otherwise behave impeccably, and yet still be asked to leave with two months’ notice, with no appeal and no help. The influence that house prices have on the level of evictions utterly refutes any claim that tenants are adequately protected.

We are calling the government to reform the rental market to give tenants better protection from eviction and greater stability in their home, and encourage landlords who are committed to providing long term homes – instead of investors who will sell as soon as the price is right.

By abolishing the section 21 eviction process, the government would encourage landlords who wished to sell to do so with their tenants in situ. Should landlords have a genuine reason to take back their property from a tenant, they would need to have appropriate grounds to do so, and compensate the tenant. Generation Rent estimates that three months’ rent would cover the cost of an unwanted move. As a result of this change in the law, tenants would have indefinite tenancies and still be able to move out if their circumstances changed. Read more about our proposals in our new paper.

As long as the government prioritises the interests of amateur landlords, renters cannot expect a stable home.

Please ask your MP to demand reform

 

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  • commented 2017-07-22 05:14:19 +0100
    Has anyone noticed that Scotland have banned no fault inventions, in principle introduced lifetime tenancies for private renters (as per most of the continent) aqnd are about to bring in rent control.

    I haven’t seen the mainstream media mention this.

    Surely we need to shout it from the roottops.

    Why should it only be England and Wales that suffer the appalling conditions that we have.;

    And as for all Tory MPs (40% landlords) voting down a bill for human homes fit for human habitation introduced by Labour MPs (only 11% landlords) this is a disgrace. Are Tory Landlord homes designed for rats instead?

    Surely we must highlight the Scottish Government action and ensure that England and Wales are not left behind?
  • commented 2017-06-19 10:22:37 +0100
    What would be a proper reason for a landlord to end a tenancy? I remember the days when the landlord had to pretend he wanted the property to live in or to house a member of the family and many lies were told — and, of course, landlords often changed their minds about their reasons and what they wanted. Making laws makes money for lawyers.