July 12, 2019

The End of the Section 21 Eviction Notice: How will it Affect Landlords?

Landlords are currently able to regain possession of a property without giving a reason using a Section 21 eviction notice. In April the Government announced plans to change this.

What is a Section 21 eviction notice?

Section 21 of the Housing Act 1988 enables landlords to evict tenants at any time after the fixed term of their contract has ended.

Landlords can do this by serving the tenant with a Section 21 eviction notice, which gives the tenant two months’ notice to leave. The landlord doesn’t need to provide a reason for the eviction.

 

What are the proposed changes?

The Government has announced plans to consult on new legislation that will see the end of Section 21 evictions.

By abolishing so-called ‘no fault’ evictions the Government hopes to put a stop to situations where tenants are evicted unfairly.

The move is designed to give tenants greater security and peace of mind, and will effectively create open-ended tenancies.

The alternative Section 8 eviction process will be amended to enable landlords to regain their home if they want to sell it or move into it.

Court processes will also be accelerated to make it easier and quicker for landlords to regain their property if they need to.

 

How will the changes affect landlords?

Under the proposals, landlords will have to use the Section 8 eviction process to regain a property.

The Section 8 process requires landlords to apply for and be granted permission to repossess by the courts.

This means that landlords will have to give a concrete, evidenced reason, already specified in law, for ending a tenancy.

It’s not yet clear when these changes will come into effect. Following the consultation, the Government will need to pass legislation in parliament for the amendments to be made – although the indication is that it intends to do this as soon as possible.

 

How have landlords reacted?

In a survey of 6,500 landlords and agents by the Residential Landlords Association (RLA), 46% said they would sell some or all of their rental properties if the changes come into effect.

However, 40% said they would wait for the Government’s other planned changes to become clear before they decide whether to stay in the market.

Critics of the move claim that scrapping the Section 21 eviction notice will make it more difficult for landlords to regain their property if a tenant has breached their contract.

Many landlords lack confidence in the Section 8 process. A survey by the National Landlords Association (NLA) found that those who used Section 8 took an average of 145 days to regain possession of their property at an average cost of £5,730, compared to 104 days at a cost of £3,525 with a Section 21 eviction notice.

The majority of landlords believe the court system would need to see significant reform to make the move viable. In the RLA’s survey, 91% said they supported the establishment of a special housing court to bring together all housing disputes under one body.

Richard Lambert, CEO of the NLA, said: ‘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. The Government should look to Scotland, where they reformed the court system before thinking about changing how tenancies work.’

 

Should landlords be worried?

Writing in the RLA magazine, Housing Minister Heather Wheeler MP stated that any new deal would aim to remove the threat of eviction without explanation for tenants, at the same time as ensuring landlords will be able to get their property back when they need to.

Wheeler stressed that Section 8 would be strengthened, and that the Government would explore whether some of the existing grounds for repossession need to be updated, saying: ‘Ultimately, both landlords and tenants stand to benefit from a more stable and secure legal framework – for investment, letting and renting alike’

The Government announced in April that it would launch its consultation on the changes ‘shortly’, although it has yet to be launched.

The RLA is urging landlords to write to their local MPs about the proposals, and has provided an online template letter.

If you are a landlord with any queries don’t hesitate to get in touch with our team of experts today.

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