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Last updated 31 October 2023
Although the Renters (Reform) Bill was introduced to Parliament on 17 May 2023, there was a significant delay before the second reading of the Bill, which finally took place on Monday 23 October 2023. It’s predicted that significant changes to the Bill are likely during its next stage as it progresses through Parliament. For a detailed update on likely changes to the Bill, head over to our Renters (Reform) Bill hub.
Introducing the second reading of the Renters (Reform) Bill in his statement to the House, the Secretary of State, Michael Gove, reiterated the Government's commitment to reform the private rented sector. Gove also committed to an accelerated timetable which, if all goes according to plan, should see the reading of the Bill completed by Christmas.
However, the abolition of Section 21, arguably the headline aim of the Bill, is likely to be delayed. While he emphasised that the Government remains committed to the removal of Section 21 and strengthening Section 8, he also confirmed the need for improvements to the way courts handle legitimate possession cases before Section 21 is abolished.
This has been widely reported as a U-turn, and it is true that it is not yet clear what these improvements will consist of or how they will be measured, so they may take some time to introduce. However, if Labour win the election, they could still prioritise the abolition of Section 21 if the current government has not made any changes before the end of its term. During the second reading, the Shadow Housing Secretary, Angela Rayner MP, argued that there can be "no more dither and delay in ending no-fault evictions."
Head over to our article, Renters (Reform) Bill: Will the court process for evictions be improved? for more detail on the key areas the Government has identified need to be addressed before Section 21 is abolished.
We will update this article again as more details emerge. Read on for more background to the current proposals on evictions and Section 21 in the Renters (Reform) Bill.
One of the most contentious and debated areas of the legislation proposed by the Renters (Reform) Bill is abolishing Section 21 ‘no fault’ evictions.
These were a key plank used by the Thatcher government during the late 1980s to persuade landlords to invest in the private rented sector by persuading them that, if a tenant stopped paying the rent, they would have a failsafe way to remove them.
While Section 8 notices require landlords to cite at least one of 17 specific grounds for eviction, a Section 21 notice can be served without the landlord having to give a reason. Then, if the tenant refuses to leave, the process of getting a possession order from the court is quicker and easier under Section 21 than with a Section 8 notice.
However, the reality is that the vast majority of landlords don’t simply evict tenants on a whim for no good reason. If a tenant is abiding by the terms of their tenancy agreement and paying their rent on time, why would a landlord want to let them go?
Section 21 notices are commonly used simply as a straightforward way to bring a tenancy to an end when both the landlord and tenant agree, or when there’s another good reason for a landlord to evict their tenant.
Nevertheless, Section 21 evictions have become the key reason why campaign organisations like Shelter and Generation Rent believed the private rented sector is broken, and although evictions using Section 21 notices are a tiny fraction of the overall rented homes market (around 8,000 a year, among a stock of some nine million households), some of the personal stories can be shocking.
Section 21 evictions, which require less paperwork and court time than other types, have also been used by some rogue landlords to evict tenants, including via ‘revenge evictions’. But, again, this is a small minority of landlords.
Housing Secretary Michael Gove has been listening to the campaigners – and from the outset the renting reforms were spearheaded by a ban on Section 21 evictions designed to clamp down on ‘injustice’ within the private rented sector.
Last year he said:
“The reality today is that far too many renters are living in damp, dangerous, cold homes, powerless to put things right, and with the threat of sudden eviction hanging over them. They’re often frightened to raise a complaint. If they do, there is no guarantee that they won’t be penalised for it, that their rent won’t shoot up as a result, or that they won’t be hit with a Section 21 notice asking them to leave.”
But evictions expert and founder of Landlord Action, Paul Shamplina has pointed out that the move will have unintended consequences, including pushing some landlords out of the market, reducing stock and pushing up rents.
Last August Landlord Action canvassed some 1,500 landlords and found that 26% of those who had evicted a tenant over the past 12 months via a Section 21 notice had done so because they wanted to sell the property.
Other reasons given included rent arrears (31%) and anti-social behaviour (22%), while just two per cent said it was in order to move back in.
The Renters (Reform) Bill, which will eventually see Section 21 ‘no fault’ evictions banned, was also a key reason for landlords seeking to remove tenants in recent months, with 28% of landlords saying this was the main reason, and a further 28% saying they were undecided.
Of those who said they planned to evict their tenant over the next 12 to 18 months, 24% said they were making the move because of the increasing legislative burden, which means they have decided to sell.
But although Section 21 ‘no fault’ evictions will disappear when the Bill becomes an Act - and it could take at least a year for the legislation to make its way through Parliament - agents and landlords are being reassured that Section 8 eviction grounds are being strengthened to compensate.
The Government laid out firm proposals in June 2022, in its White Paper, ‘A Fairer Private Rented Sector’. A House of Commons research briefing on the end to Section 21 evictions, published in March 2023, summarised these proposals and stated:
“The grounds for possession will be reformed to ensure landlords have effective means to gain possession of their properties when necessary. New grounds will be created to allow landlords to sell or move close family members into the property. Grounds covering persistent rent arrears and anti-social behaviour will be strengthened.”
Following on from this pledge, two of the new mandatory grounds that have been introduced in the Bill are:
Selling: Landlords will be able to give tenants two months’ notice if they want to sell the property. However, this cannot be applied within the first six months of a tenancy.
Repeated serious arrears: Under the current ‘serious rent arrears’ ground, landlords have to wait until the tenant is more than two months in arrears before issuing a Section 8 and they must still be at least two months in arrears at the time of any court hearing. This ‘loophole’ means that tenants can reduce their arrears to just below the two-month threshold to avoid appearing at court, and the landlord then has to restart the possession claim process from the beginning.
This new ‘repeated serious arrears’ ground allows for mandatory eviction if a tenant has been in at least two months’ rent arrears three times within the previous three years, regardless of how much they owe at the time of the hearing.
And some amendments to existing grounds that all landlords should be aware of:
Moving into the property: Currently, landlords can only issue a Section 8 under this ground if they themselves or their partner want to move in. The amendment extends this to ‘close family members’, but notice cannot be given during the first six months of a tenancy.
Serious rent arrears: This ground will be amended so landlords will no longer be able to evict tenants if the reason they’re in arrears is because of a delay in receiving their Universal Credit payments.
Then there’s one change that has been talked about, but it’s not yet clear how the process will be improved in practice:
Evictions for antisocial behaviour: Although the Government has said that notice periods for serious antisocial behaviour will be lowered, there is already no notice period required for criminal or serious antisocial behaviour. Landlords can issue proceedings immediately, although no order can be made during the 14 days following service of the notice. However, the Government has stated that it will look into issuing further guidance to help landlords and tenants resolve issues at an earlier stage.
A full list of the reformed grounds for possession and required notice periods can be found on the government website.
Before a Section 8 notice can be issued for rent arrears, landlords have to wait until a tenant is at least two months behind. If the tenant doesn’t leave the property by the required date, the landlord has to then apply for a possession order, which could take some time to make its way through the court process, meaning it could be many months before a possession order is granted.
During this time, the tenant is unlikely to be paying rent, so landlords could easily find themselves with a considerable hole in their finances, especially if they have a mortgage on the property that they need to keep paying.
So, many landlords will use Section 21 to evict a tenant who’s falling behind with their rent. They can issue that immediately and once the two-month notice period has elapsed, if the tenant refuses to leave, they can apply for an ‘accelerated possession order’. This usually doesn’t involve a court hearing, so it tends to be quicker than applying for a standard possession order.
Once Section 21 is scrapped, the concern is that it could be more time-consuming and costly for landlords to evict non-paying tenants unless either the accelerated procedure is retained for rent arrears grounds, or big improvements are made to the court possession process.
Paul Shamplina, Chief Commercial Officer at HFIS and Founder of Landlord Action, says,
“At Landlord Action, we’ve seen a huge increase in the number of landlords affected by rent arrears - December 2022 was our busiest month in the history of Landlord Action. There has also been a rise in landlords looking to use Section 21, either because they are looking to sell the property or due to anti-social behaviour. Whatever their reason, many landlords don’t fully appreciate that evicting a tenant in arrears is a legal process that requires them to follow certain steps, such as giving the right notice at the right time. If they get any part of it wrong, the court can simply throw out their case and they have to start over again from scratch, while their tenant continues to live rent-free in their property. My advice to landlords who find themselves in the position of having to evict, is to seek professional help from a legal eviction specialist, such as Landlord Action.”
In this video, Paul explains the steps to be taken if you are affected by rent arrears.
Read our article on what to do if your tenant can’t pay the rent and falls into arrears, for more guidance.
If the proposals to do away with Section 21 become law, all private rented tenancy agreements will become periodic, with no initial fixed period and no set end date.
Tenants will have the right to stay in a property until either they choose to leave - giving two months’ notice at any time - or their landlord is able to evict them under a specific ground.
However, in most cases, the first six months of a tenancy will continue to be protected for tenants, as long as they haven’t breached their agreement. So, even if landlords have a valid ground for eviction – for instance, if they want to move into the property themselves or sell it – they won’t be able to do so within the first six months.
For more information on banning Section 21, watch this Q&A with Paul Shamplina and Editor of LandlordZONE, Nigel Lewis.
For more insights on the Renters (Reform) Bill, listen to a special episode of The Property Cast with Sean Hooker, Head of Redress at the Property Redress Scheme, and leading property expert Kate Faulkner OBE, who share their initial reactions to the Renters (Reform) Bill – will it deliver what tenants need and will it have unintended consequences? Tune in to find out what the experts think.
Our media partner, LandlordZONE, offers exclusive insights and breaking news on the private rented sector. Keep up to date with everything you need to know by subscribing to LandlordZONE, the UK’s largest online landlord property news website.
You can also visit Total Landlord's Renters (Reform) Bill hub which will be regularly updated as more details emerge.
