How changes to Section 21 will affect landlords

Nia
Mar 06,2020
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The 1980s were a golden age for landlords when the Rent Act of 1977 was changed to ensure that residential landlords were given some assurance from government of the flexibility of their rights as landlords in the shape of Assured Shorthold Tenancies.  This allowed landlords some leeway when it came to sell their rental properties and evicting tenants using a 2-month notice period.

Section 21 notices, also known as no-fault evictions, allow landlords to evict tenants without reason once their contract comes to an end.

But with tenants’ activists campaigning hard for tenants’ rights, the Tenant Fees Act came into place in Wales in September 2019 to ban unfair letting fees (read our blog about it here).  The government, however, didn’t feel that this was enough, and on the 15th April 2019, it announced that it was considering abolishing Section 21 notices altogether.

While everyone is for better tenancy rights which forge better standards for tenants, landlords and letting agents, many fear that the stricter regulations and rental policies will make the sector more difficult for landlords. Is this true?

Why abolish Section 21 notices?

Let’s start with the facts: Section 21 notices seek possession of a property let on an Assured Shorthold Tenancy.  It’s the way of starting the eviction process in England and Wales if there is no fault on the part of the tenant.  Section 21 notices:

  • Can only be issued for assured shorthold tenancies – if the tenant has an assured tenancy, they have greater security of tenure and it is more difficult for landlords to regain possession.

  • Section 21 notices must be done in writing.

  • The tenant must be given at least 2 months’ notice to leave.

  • The tenant is obligated by law to pay all rent up until the day the tenancy finishes.

Please note that if the tenant’s deposit hasn’t been protected, which is illegal, then Section 21 notices are invalid.

According to many industry bodies, Section 21 eviction notices are one of the leading causes of family homelessness in the UK, especially in conjunction with welfare reform and the introduction of Universal Credit.  50,000 people signed the recent “End Unfair Evictions” coalition petition last year, meaning the government had to start making changes to address the clear issues surrounding no-fault evictions.

The issues arising from banning no-fault evictions are also at the forefront of industry leaders’ minds, too – this is not a clear-cut decision on behalf of either landlords or tenants.

How will abolishing Section 21 notices affect landlords?

The option left on the table for landlords if Section 21 is abolished is the Section 8 legislation which currently states that one or more statutory grounds for possession of the rental property is proved in order to evict a tenant.  Section 8 notices allow for tenants to defend themselves against eviction allegations, making the process lengthier and potentially more costly for both parties. Some argue that the potential of a rental void due to prolonged negotiations can bring unreasonable pressure on landlords.  It is for this reason that, under the circumstances that no-fault evictions are scrapped, Section 8 notices will also have to undergo an overhaul to create a fairer system for both parties.

You see, while the flexibility of rights that the Section 21 notices afford landlords has its more immediate advantages for landlords, conceding to the abolition of these notices allows for a more trustworthy relationship between the landlord and the tenant.

With post-Brexit plans dominating government for the next few months, it’s unlikely that these changes will come into play for a long while.  But landlords’ associations are forward planning, nonetheless, allowing time for reasoned, measured responses that don’t affect the carefully balanced pendulum that is the relationship between landlord and tenant.  We shall all be awaiting the written draft of the eviction reform with bated breath, but whatever the outcome, we will be here to help you navigate any new legistlation.


For updates on industry regulation, as well as tips and advice for both landlords and tenants, please visit our blog page and follow Preseli Lettings on social media now.