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Section 21 Changes: What Are They and What Do Landlords Need to Do?

The UK private rental market is complex, with many interwoven rules and regulations which have consequences if not complied with.

There are many laws regarding the protection of tenant’s rights which a landlord must adhere to and follow. Laws have been specifically curated for the protection of tenant’s rights, such as theSection 21 of the Housing Act, which governs the procedure a landlord must follow to terminate an assured Short hold tenancy arrangement on a non-fault basis. 

Some groups advocating tenant rights argue that it is abused by landlords and give them an unfair advantage over a tenant, who want little more than to make long term planning decisions for themselves and their family without having to worry whether they have longevity of tenure.  Many landlord groups reference the fixed term of a tenancy agreed between the parties and argue that the procedure merely allows them to ensure they can recover the property at the end of the fixed term in the event the parties cannot reach an agreement for renewal. 

A landlord may therefore serve a section 21 notice, once a minimum of four months of a tenancy have elapsed to expire on or after the expiry of a fixed term, thereby potentially preventing a tenant from enjoying the longevity of tenure which so many desperately crave.  There’s no doubt that it’s an emotionally charged subject with valid and compelling arguments from both sides of the isle.

Section 21 Notice

As per section 21 of the Housing Act 1988, landlords have the right to reclaim possession of their property without offering an explanation for their decision to their tenants. Prior to the Coronavirus Act 2020 being given royal assent in March 2020, the minimum time frame a landlord needed to offer a tenant was two months before they were legally entitled to enforce the notice by way of the county court, and effectively start the legal eviction procedure.  It was extended during the Coronavirus pandemic to six months.  This is tapering down as we move towards the latter stages of the pandemic.  The current time frame is four months but the government has announced that pre-pandemic conditions will return from 1st October 2021.

It should be noted that this part of the Act specifically applies to assured Short hold tenancy agreements which the overwhelming majority of those renting in the private sector will fall under. A section 21 notice is often called a ‘no-fault’ eviction since landlords don’t need to point out any faults with the conduct of the tenancy, but, to the angst of many tenant advocacy groups, this is the focus for their anger

It’s no surprise that this notice is an emotionally charged topic of discussion and debate within the industry. It is argued that it puts renters in a position of extreme vulnerability, to livewith the fear of being uprooted from friends, family and school, to name a few, and therefore it has a detrimental impact on their welfare, finances and decision making, with the view that this holds back growth within the economy.

What may change?

Amidst the rising resistance by the renters, the UK government decided to take the matter under consideration in 2019, with a strong indication that section 21 notices will be abolished.  While the government stated that a further consultation with regards to the Renter Reform Bill will be forthcoming in late 2021, there is likely to be a delay, but by no means an end, on the final verdict regarding the abolishment of section 21.

Consequences of the Proposed Ban on ‘No Fault Evictions’

While the government is listening to advocacy group on both sides of the isle, their proposal may not be the silver bullet that renters believe it to be because of two reasons:

Firstly, as identified in a survey by The Residential Landlords Association (RLA), 84% of members claimed that if the ban is approved, they would be more selective in picking their tenants. This means that those people who could pay the best price and have the most secure profiles would gravitate towards the top of the rental pile, thereby impairing and possibly excluding those who cannot pay as much or do not have strong employment profiles.  This would invariably cause further stress in an already fractured system, and possibly, almost drive forward the creation of a two-tier renting environment.

Secondly, it is believed that many landlords will refuse to give their properties up for rent, and turn towards the Airbnb style arrangement and holiday lets. This could be disastrous since over one-third of the UK’s population relies on the private rental market.  It is without question a serious issue given the current lack of good and affordable property for rent and concerns that this will only be exacerbated by the effects of the Coronavirus pandemic.

To strengthen their position, landlords have proposed that before any final decision is passed on the scrapping of section 21, section 8 should be revisited and improved.

Section 8 Notice

Section 8 notice is served by a landlord when they wish to reclaim their property during the fixed term or statutory periodic, primarily on the grounds of a breach of the terms of the tenancy. The accumulation of rent arrears is one example where a section 8 notice can be served. While this act certainly helps landlords address a tenancy which is problematic, it is potentially a more complicated, lengthier and expensive process.

If you’re currently a landlord or considering becoming one then it’s certainly in your interest to keep an eye on the evolving landscape and what the changes to Section 21 within the Renter Reform Bill will have on your investment.  

At Landlord Assist, we actively monitor this evolving environment to ensure that our activities on your behalf are relevant and compliant.  Should you find yourself in a situation whereby you need to end the relationship with your tenant then we have a specialist team dedicated to the Tenant Eviction services UK and tenant eviction procedure. Reach out to us for a free consultation or should you just require some friendly and competent advice.

Consult our Landlord and Tenant team to find out how we can help you.