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Section 21 Reforms: What You Need to Know

Section 21 Reforms: What You Need to Know

Recently, we have had an increasing number of enquiries from landlords and tenants alike on what’s happening to Section 21 – the law through which landlords can regain possession of a rental property during a tenancy. In April this year, the Government announced that it was hoping to make changes to the law to help prevent landlords evicting tenants for no good reason. However, there are two sides to every story, and the announcement has led to concerns being raised by tenants and landlords about the changes. So, we’re giving you the lowdown on the Section 21 debate so far.

What is a Section 21 notice?

Section 21 refers to the 21st section of the Housing Act 1988. Under this section, landlords can give notice to tenants to vacate a property at the end of their fixed term or during a periodic period of an Assured Shorthold Tenancy. While Section 21 is sometimes used to remove tenants, who have behaved antisocially (e.g. causing damage at the property or being a nuisance to neighbours), it can also be used if landlords simply want to move back into their properties themselves.

Once a Section 21 notice has been issued, a tenant has two months to vacate the property. If the tenant refuses to leave after that time, the landlord can apply to the court for a possession order, and the tenant may eventually be evicted by a bailiff.

What changes are being made?

At present, none. But the Government is holding a consultation on whether Section 21 should be abolished to prevent landlords from evicting tenants for no reason. The idea is to give tenants more stability, but this has raised fears that landlords won’t be able to regain control of their properties easily if they need to.

What will the changes mean for landlords?

If Section 21 is abolished, landlords will still be able to use Section 8 to evict tenants, but they will have to give a valid reason, such as a breach of the tenancy contract, in order to do so. They won’t be able to evict tenants just because they fancy having their properties back for themselves. However, the Government has suggested that amendments will also be made to the Housing Act to allow landlords to regain possession under certain circumstances (if they themselves risk becoming homeless, for instance, or if they need to sell).

One worry is that fewer people may enter the property rentals game if legislation controlling the section continues to increase – especially given that tenant rental fees have been banned recently, making the renting process more expensive for landlords. If predictions are right, then this is a worrying trend, given that more than over 4 million people now live in rented accommodation in the UK – a figure that has risen dramatically over the last 20 years. This sort of demand requires supply, so it’s important that any new housing laws take into account the needs of both tenant and landlord.

What will the changes mean for tenants?

It’s thought that any new legislation will apply only to new tenancies, rather than existing ones, so it’s likely that changes won’t make a difference to tenants until they decide to move. The hope, though, is that tenants will gain increased stability, safe in the knowledge that they won’t be asked to leave their residences with just two months’ notice.

In practice, if there is a knock-on effect of reduced investment in the private rentals section by landlords, the downsides for tenants could be less choice when it comes to moving and increased rents due to low property supply. So, while there could be benefits for tenants, it’s not necessarily all rosy – we simply all need to wait and see what proposals are made following the Government’s consultation on this issue. The plusses and minuses will depend on exactly what reforms are suggested.

What should I do now?

Landlords were given the opportunity to voice their opinions on the proposed changes by completing an online survey.

Other than that, you don’t have to do anything, for now. Until the consultation has taken place and the Government has voted on any proposed reforms, tenancies and eviction notices will continue to be drawn up in the same way that they always have. We will, of course, keep our clients up to date on any changes to legislation regarding Section 21 at https://julietwist.co.uk/property-blog/

 

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