How will Government changes to Section 21 affect landlords?

How will Government changes to Section 21 affect landlords

Following the Government announcement about planned changes to the eviction process made on the 15th April 2019, and the launch of the consultation on these changes, the National Landlords Association (NLA) have created the following guide to help landlords understand changes to the eviction process, how the changes will affect future eviction and when the changes will come into effect.

What has been announced?

The Government launched their consultation on the abolition of Section 21 on Sunday 21 July 2019. The consultation will be open for 12 weeks, and closes on Saturday 12 October. The consultation covers England only.

 

We have produced a downloadable guide to help members navigate the consultation document, including an outline of the consultation and details about the issues which the Government is asking under each question.

What is the Government proposing?

The consultation proposes the removal of Assured Shorthold Tenancies (ASTs) from the Housing Act 1988. This would mean that assured tenancies would become the only type of tenancies available to private landlords. It’s also proposed that the changes apply to social landlords.

The Government is proposing that landlords and tenants can agree either a fixed-term assured tenancy (meaning both landlord and tenant are committed to a set period), or a periodic assured tenancy. A fixed-term tenancy which is not ended by the tenant, or by the landlord using Section 8, could either be renewed to a new fixed term, or automatically become an assured periodic tenancy.

When will the changes come into force?

The changes are being consulted on, after which the Government will need to respond, and if they wish to take forward, legislate through discussion in Parliament.

The Government has proposed that – once the law has been passed by Parliament and approved by the Queen – there is a six month ‘transition period’ before the law comes into force. However, they are consulting on the length of this.

This will take some time and – assuming nothing else changes politically and the Government prioritises it – it’s unlikely any changes will come into force before late 2020/early 2021.

What about existing tenancies?

The Government has confirmed they do not plan for the changes to be retrospective, so any existing ASTs on the date the law comes into force will continue and still have use of Section 21. When the tenancy comes to an end, any new tenancy agreement will be an assured tenancy.

How will landlords be able to bring tenancies to an end?

To end an assured tenancy, landlords must use one of the grounds specified in Schedule 2 of the Housing Act 1988, and follow the Section 8 possession process.

How will tenants be able to bring tenancies to an end?

Tenants would still be able to give notice to bring a tenancy to an end, and the Government is not proposing to increase this from the current one month’s notice.

Tenants could only give notice at the end of a fixed term, or during a periodic tenancy, unless the tenancy agreement includes a break clause.

What changes is the Government proposing to mitigate the loss of Section 21?

The Government has suggested that improvements to the Section 8 process. These include:

  • Introducing a new ground when the landlord wants to sell the property and widen the current ground for use when landlords, their spouse or partner, or their families want to move into the property
  • Amending the current mandatory ground 8 (rent arrears) so that landlords need two months’ arrears on notice, and one month’s arrears at the time of the hearing (and that if there are three instances of the tenant paying down and then re-accruing arrears, the ground becomes mandatory)
  • Possibility of strengthening antisocial behaviour grounds – although no specific proposals yet
  • Domestic violence ground is made available to private landlords, and that it is amended to give the victim more rights and protections
  • Strengthening ground 13 to allow landlords to use this if tenants routinely refuse access to the property for repairs / safety checks.

The Government has also proposed introducing an accelerated process for possession (which would remove the need for a court hearing, unless the tenant challenges it) for mandatory grounds.

The Government is working to introduce reforms to the court process – but this is not being consulted on. The Government is due to respond to the earlier call for evidence on a housing court separately.

In order to maintain existing protections for tenants, the Government wants to include the prescribed information requirements that currently exist via the Deregulation Act for the valid use of Section 21 (e.g. Gas Safety certificate, deposit certificate and information, EPC, How to Rent) in the Section 8 process, as a way to encourage health and safety standards in the sector. However, they do not give details in the consultation about how this would work.

Are there any exceptions?

The Government’s indicated that they do not believe exceptions are needed for student tenancies, although they ask for views for extending the current ground 4 to regain possession at the end of an educational course to private landlords, as well as institutions.

The Government is looking at additional strengthening of the grounds which may be needed for Build to Rent landlords – for example, to comply with planning restrictions which require a proportion of affordable rent properties.

Short-term lets e.g. holiday lets, but also where properties are let for short periods due to work requirements or absences, are proposed to be outside of the structure.

What can landlords do?

Landlords can make an individual response to the consultation and we encourage them to do so. The consultation is available online from the Ministry of Housing, Communities and Local Government (MHCLG) website.

Responses can be submitted via an online form, email or post by 12 October.

We have produced a guide to help members navigate the consultation document, including an outline of the consultation and details about the issues which the Government is asking under each question.

Landlords can also continue to lobby their MPs about the Government’s proposed changes, and the impact this will have on the private rented sector, and their ability to offer tenancies. We have produced a lobbying guide to support landlords in contacting their MP and asking them to take action on their behalf.

What is the NLA doing?

The NLA will continue to lobby the Government on these changes.

  • We will be responding to the consultation on behalf of members – including using member case studies to illustrate the impact of the loss of Section 21.
  • We will be delivering our postcard petition to No 10 to argue to ‘Save Section 21’ – this can be signed online via landlords.org.uk/section21.
  • We have commissioned an independent economic analysis to show what the impact of the loss of Section 21 will be, which will be published in the coming weeks.
  • We will continue to work with others in the sector to put forward a united approach to Government – such as the Fair Possessions Coalition.
  • We will continue to engage with and lobby politicians and government officials on the changes.
  • We will continue to use the media to make the case for wholesale reform of Section 8 and the courts – using evidence gathered from members to back up our case.

What is the NLA’s view?

We put out a statement following the release of the consultation:

Chris Norris, Director of Policy and Practice at the NLA, says:

“The court system has been in dire need of reform for a long time, so we’re happy to see action on this. Any improvements to this system need to be in place, properly funded and fully functional before the government even contemplates changes to section 21.

“Landlords have been relying on section 21 to compensate for the many failings of the section 8 fault-based process, which has become too costly and time-consuming.

“If the Government want to deliver a fairer, better quality and more affordable private rental market, as they claim, they should try listening to the concerns of landlords, not just court the voting renters.”

Any other questions?

Please contact the Policy team at policy@landlords.org.uk or on 020 7840 8938.

How to lobby your MP

It’s vital that individual landlords make their voices heard on Section 21. The NLA Policy Team has created a guide to help you to contact your MP to raise your concerns about the Government’s proposed changes.

Download the guide