Government announce intention to abolish Section 21

The government has outlined plans to consult on new legislation to abolish Section 21 evictions, often called ‘no-fault’ evictions, as part of their continuing overhaul of the sector.

Under the UK government’s proposals, landlords will no longer be able to evict tenants using the Section 21 notice procedure and will only be able to end tenancies where they have a legitimate reason to do so.  If the changes get through Parliament, landlords will need to rely on Section 8, meaning they will need to provide a concrete, evidenced reason already specified in law to bring a tenancy to an end.

To support these proposed changes, Section 8 evictions are also set to be reformed so that property owners are able to regain their home should they wish to sell or move into it.

To give landlords confidence, the government has said it will also speed up court processes so that landlords are able to regain their property swiftly and smoothly.

Prime Minister Theresa May says the move will protect responsible tenants with the “long-term certainty and the peace of mind they deserve.”

Similar plans have been announced for Wales and in Scotland new rules, in place since 2017, have required landlords to give a reason for ending tenancies. Currently, there appear to be no plans to end ‘no-fault’ evictions in Northern Ireland.

Naturally, opinion is divided on whether abolishing Section 21 within England is a good idea.

Hamilton Fraser’s CEO, Eddie Hooker, had this to say

“The government has been under increasing pressure to ban Section 21 evictions after critics campaigned that they tilt the balance of power towards landlords.  There are arguments both for and against the ban, but as always, the devil really is in the detail, of which we are yet to learn.”

– Eddie Hooker

“The overriding objective of this potential change is greater security for tenants, which can only be a good thing. However, it is important to remember that the majority of landlord tenant partnerships are problem free and so it is imperative that that the private rented sector remains objective.

Swinging the pendulum too far in favour of tenants, or landlords for that matter, is problematic for the sector as a whole, and therefore the introduction or removal of certain elements such as ‘no-fault’ evictions requires a delicate balancing act. Unfortunately, many landlords see changes such as this as a reason to turn their back on buy-to-let at a time when demand for private rented homes is rising and supply is falling. At Hamilton Fraser we strive to provide landlords, letting agents and tenants with the knowledge to ensure a smooth tenancy.

Our Hamilton Fraser Academy events are aimed at educating agents on the best ways to manage their clients’ tenancies to avoid disputes where possible, and resolve them where they do. This includes education surrounding the eviction process.

It is therefore important that any changes made to section 21 are carefully deliberated, and support rather than hinder the sector moving forwards.”

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According to the government’s own figures, 90 per cent of tenancies are ended by the tenant. Of the tenancies ended by the landlord, the majority are terminated because of rent arrears. This was reflected in research carried out by Landlord Action, part of Hamilton Fraser, which reported that 56 per cent of landlords said they had used Section 21 because of rent arrears.

Paul Shamplina, founder of Landlord Action, says:

“The reason landlords use Section 21 to gain possession rather than Section 8 is because it is typically quicker.  Landlords have little faith in the current court system and few anticipate being able to pursue rent arrears, so most take the decision to forfeit recovering lost rent and just to get their property back as soon as possible so they can re-let.  Section 8 also comes with the added risk that tenants can counter-claim, therefore delaying the process further.

If Section 8 is going to have to be relied on more heavily, it must be “fit for purpose” and any changes will need to be carefully considered.”

Paul Shamplina

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Richard Lambert, the CEO of the National Landlords Association (NLA), states:

“Landlords currently have little choice but to use section 21. They have no confidence in the ability or the capacity of the courts to deal with possession claims quickly and surely, regardless of the strength of the landlord’s case. England’s model of tenancy was always intended to operate in a sector where section 21 exists. This change makes the fixed term meaningless, and so creates a new system of indefinite tenancies by the back door.

The onus is on the government to get this right. It’s entirely dependent on the government’s ability to re-balance the system through Section 8 and court process so that it works for landlords and tenants alike.”

It is not yet clear when these changes will come into force, however as reported by the NLA the changes will not be retrospective and this will not therefore affect existing tenancies.

“The government should look to Scotland, where they reformed the court system before thinking about changing how tenancies work. If the government introduces yet another piece of badly thought-out legislation, we guarantee there will be chaos.”

– Richard Lambert