A move that could spell bad news for landlords, though has been touted as beneficial for tenants across the country.
What is Section 21?
As things currently stand, Section 21 notices, or “no-fault evictions”, enable landlords to evict tenants without explanation at short-notice, under the condition that their assured shorthold tenancy agreement has expired. Landlords are required to provide at least two months’ written notice but are not obliged to offer an explanation for the eviction.
If the tenancy agreement is yet to expire, landlords can seek eviction by way of the Section 8 notice procedure. However, Section 8 has been labelled “slow, costly and inefficient” by the National Landlords Association, which is why Section 21 is often enforced to end tenancy agreements.
The Proposed Changes
According to the government, the proposed abolishment of Section 21 forms part of an on-going initiative to both combats the housing crisis and rebalance bargaining power in the favour of tenants.
They argue that Section 21 gives landlords too much freedom over eviction processes, which is open to abuse. In the event that Section 21 was to be abolished, this would leave landlords at the mercy of Section 8 to evict tenants. Nevertheless, the government insists that the new proposals are fair and ensure that landlords are able to evict tenants and reclaim their properties, if they have a justified reason for doing so.
Bad News for Landlords?
The existing terms of Section 8 will be modified as part of the policy overhaul, so as to allow landlords to reclaim their property to either sell it or move into it. However, there will be no allowance for the landlord to terminate the tenancy agreement to rent the property to a different tenant for a higher rental payment.
Landlords will still be able to evict tenants on the grounds of rent arrears, damage to the property and failure to comply with the terms of the tenancy agreement. Nevertheless, doing so will mean pursuing eviction through Section 8, which according to the NLA is a time-consuming and costly court process – often calling for legal representation.
Good News for Tenants?
From the tenants’ perspective, the beneficial impact of the new policy remains debatable at best. As far as the NLA is concerned, the removal of Section 21 would effectively pave the way for indefinite tenancies, tipping power in favour of the tenant.
In which case, landlords are likely to show growing resistance to taking on ‘risky’ tenants, who may subsequently struggle to find affordable housing. This could leave vulnerable tenants in an even more difficult position, effectively creating a new letting landscape where nobody wins.
Whether the government chooses to go ahead and implement the new policy remains to be seen. Nevertheless, the backlash on both sides of the equation has already been considerable.