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One of the headline policies of the government’s recent Renters Reform Bill has been the proposed abolition of ‘no-fault’ Section 21 Notices. The announcement doesn’t come as much of a surprise, having been first put forward as far back as April 2019. The Conservative government have consistently stated their manifesto commitment to the abolition of ‘no-fault’ evictions, with many in the property industry seeing it as a case of ‘if’ not ‘when’. However, expected or not, the announcement comes with huge implications for the private rental sector and landlords throughout the UK.
What are Section 21 Notices?
Section 21 Notices enable private landlords to claim repossession of their properties from tenants on Assured Shorthold Tenancy (AST) agreements, without having to establish or prove fault on the part of the tenant. As landlords need not demonstrate the fault of a tenant to issue one, Section 21 Notices are commonly referred to as ‘no-fault’ evictions. Where tenants are at fault and have broken the terms of their tenancy agreement, landlords can issue Section 8 Notices.
To issue a Section 21 Notice in England or Wales, landlords must issue the notice to a tenant in writing, providing a tenant with at least 2 months of notice to leave the property. Such notices cannot be issued within the first 4 months of a tenancy or within the fixed term of a tenancy agreement, unless there is a clause in the contract stipulating so.
Tenants currently have a range of protections against the improper use of Section 21 Notices by landlords. Since 2015, retaliatory evictions have been prohibited. Landlords who fail to respond or provide adequate response to genuine complaints by tenants about the condition of a property can be reported to the local authority, who are able to prohibit the issuance of Section 21 Notices for at least 6 months. What is more, tenants can appeal Section 21 Notices which have been improperly issued or where landlords have failed to meet their legal obligations (such as the requirement to hold deposits in a registered TDS scheme).
What Will Change about Section 21 Notices?
The recent housing white paper, titled ‘A fairer private rental sector’, was published on the 16th of June 2022. The white paper sets out a 12-point plan to deliver “a fairer, more secure, higher quality private rented sector” (Wilson, Barton, & Cromarty, 2024). Although the proposals will require legislation to be enacted before they can come into force, the government announced its intention to introduce a Renters Reform Bill in the 2022-2023 parliamentary session, suggesting change is imminently on the horizon.
One of the leading proposals in the housing white paper, and the consequent Renters Reform Bill, will be the abolition of Section 21 evictions. Instead, the government will introduce a simpler, more secure tenancy structure, where tenancies only end in cases where the tenant wishes to vacate the property or where the landlord has valid grounds for repossession.
The government needs to attain Royal Assent before they can introduce the Renters Reform Bill into law. Once they do so, they intend to provide landlords with 6 months’ notice before abolishing ‘no-fault’ evictions. After this, all new tenancies will be exempt from Section 21 Notices. Historic tenancies will transition onto a new periodic structure to prevent a two-tiered system.
Although the government wishes to do away with no-fault evictions, they also acknowledge the need for landlords to reclaim possession of their properties in certain situations. As such, the new legislation will include amendments to grounds for possession notices under Section 8, allowing landlords to repossess properties in cases where they intend to:
- Sell the property
- Move ‘close’ family members into the property
- Move into the property themselves
However, similar to the current Section 21 protocol, landlords will not be allowed to use these grounds within the first 6 months of a tenancy. The Fairer Private Rented Sector white paper argues that these amendments are “comprehensive, fair, and efficient, striking a balance between protecting tenants’ security and landlords’ right to manage their property” (The Department for Levelling Up, Housing & Communities, 2022).
Additionally, the government also intends to introduce a new formalized ground for possession for cases of ‘persistent rent arrears’. Landlords will now be able to pursue mandatory eviction of tenants in cases where the tenants have been in at least two months’ rent arrears three times within the past 3 years, regardless of the outstanding balance at the time of a hearing. On the one hand, this change marks an improvement over the current situation, however some landlords may be inclined to argue that the government have still not gone far enough in this regard.
Finally, the white paper highlights an intention to reduce the notice period for existing mandatory eviction grounds in cases of criminal or serious anti-social behaviour. Although they do not provide clarity yet on what the notice period will be reduced to.
The Rationale Behind the Abolition of ‘No-Fault’ Evictions
Charity campaigners have persistently lobbied for the abolition of Section 21 Notices, citing them as one of the primary reasons for reported homelessness. Local authorities in England have a duty to secure housing for unintentionally homeless households in a priority need category. When carrying out this duty, the local authority records the reason the household became homeless. In doing so, they found that 13% of households reporting homelessness or at risk of homelessness in 2020/2021 found themselves in that position due to the end of an AST (private tenancy). Although this includes any reason for ending an AST, not just the issuance of Section 21 Notices. In just under half of these cases, the tenancy ended due to the landlord wishing to sell or re-let the property.
It is also argued that landlords should not have the ability to vacate tenants from their properties without reason and that the current ability to do so has a detrimental effect on tenant wellbeing. Research suggests that many tenants feel unable to plan due to housing insecurity. A factor that negatively affects a tenant’s mental health and the education of their children. A study commissioned by the charity Shelter found that a quarter of tenants have resided in three or more privately rented homes in the previous five years, with the figure for families with children falling to one in five. Consistent movement prevents households from establishing roots in local communities and leads to children experiencing disrupted education, reduced levels of teacher engagement, and fragmented friendship groups.
The government argues that housing insecurity, due in part to the ease in which landlords can evict them through Section 21 Notices, makes tenants reluctant to exercise their rights to secure repairs and challenge rent increases. One in twelve tenants have reported a reluctance to report problems or request improvements for fear of losing their home. It is suggested that this is especially the case for older tenants who may need mobility and access adaptations to support their continued living in a property. The fear of reporting problems and challenging poor property standards fails to hold landlords to account and prevents proper development of privately rented housing stock.
The Challenges of Abolishing Section 21 Notices
For many landlords, the abolition of Section 21 Notices will be a further frustrating nail in the coffin of the UK’s private rental sector. Although the government and charities raise valid points about the effect that housing insecurity can have on tenant welfare and property standards, many of their claims have been challenged by the lettings industry.
Firstly, it is important to reiterate that the vast majority of tenancies are ended by tenants. The flexibility of the private rental sector is one of the key reasons why people choose to rent rather than buy. Data suggests that 90% of tenancies are ended by tenants themselves, with the remaining 10% split between no-fault and at-fault evictions (O’Leary, O’Shea, & Albertson, 2018). So, for the vast majority of tenants, the ability and flexibility to move is a desirable aspect of renting. This is especially the case for younger tenants, who comprise the bulk of tenancies in England and Wales.
Secondly, there appears to be an underlying assumption that landlords are opting to evict good, well-paying tenants for their own nefarious reasons. The reality is that ‘no-fault’ evictions are rarely truly without fault and the cases where they are without the fault of the tenant, will not be addressed by this legislation. Professional landlords want long-term, committed, and considerate tenants. Void periods cost time and money, advertising costs time and money, beginning new tenancies cost time and money. Logically, it makes no sense to suggest that landlords – who are typically a risk averse cohort – would actively seek to end good tenancies of their own accord.
Many landlords intentionally utilize Section 21 Notices in lieu of Section 8’s. Anecdotal evidence and studies by the NRLA suggest that landlords will often use Section 21 Notices to evict problem tenants, such as those that find themselves in persistent rent arrears or those who demonstrate signs of anti-social behaviour. Section 21 Notices provide a straightforward mechanism to reclaim possession of a property. Faced with the alternative of proceeding down costly and protracted Section 8’s, with which landlords tend to have little faith in, it’s only understandable that ‘no-fault’ evictions would be the preferable route.
Even in the cases where tenants are truly evicted without fault, it is often due to landlords wishing to reclaim a property for personal reasons. This could be to sell the property, make it available to family members, or even move back into it themselves. Under the new proposals, all of these reasons will remain valid grounds for eviction, assuming landlords can provide supporting evidence. So the question remains to what degree the legislation will reduce truly without fault evictions.
Finally, the suggestion that preventing landlords from issuing Section 21 Notices will help to reduce homelessness may prove to be a false dawn. If the argument above holds and many landlords issue Section 21 Notices to avoid the costs and time associated with Section 8’s, councils will likely find a sharp rise in ‘at-fault’ evictions. With the overall figures for homelessness caused by the end of an AST remaining broadly the same.
What Will the Abolition of Section 21 Notices Mean for Landlords?
From an objective standpoint, the abolition of Section 21 Notices may not actually be that big of a change from a landlords’ rights perspective. Good, professional landlords will continue to be able to evict problem tenants from their properties and the formal grounds for doing so have been expanded, to hopefully add security to the use of Section 8’s. Equally, landlords who wish to sell their property or re-utilize it as a family home will continue to be able to do so.
The biggest impact on landlords will be the actual mechanism for evictions. Section 21 Notices can no longer be relied upon to facilitate the simple eviction of prospectively problem tenants. Evictions will now require longer, more formal, and potentially more costly processes every single time. This is perhaps the crux of the matter. For the majority of landlords, the change will just mean additional costs, time, and effort to achieve (hopefully) the same result. With the additional salt in the wound being that this is yet another example of hostile government legislation being introduced at the expense of landlords.
Notably, it is now going to be more important than ever for landlords to continually gather and store evidence in the correct manner. It will be in a landlord’s interest to catalogue and hold any evidence that may provide grounds for future eviction, even if they have no intention of pursuing an eviction immediately. Detailed evidence of rent arrears, written reports of anti-social behaviour, and tenancy review photographs will need to be stored and catalogued effectively. In many ways, it will become even more advantageous for landlords to utilize effective property management software, like Landlord Vision.
Some brighter news is that the government plans to reduce the number of cases making it to the courts by bringing in a new ombudsman for British landlords, helping to ensure disputes can be easily resolved without legal recourse. Capturing a record of payments and compliance evidence through Landlord Vision will help landlords to provide evidence of their good conduct when referred to the new ombudsman by tenants.
In the shorter term, it’s likely that Section 21 Notices will rise dramatically ahead of changes to the legislation. Data from the Ministry of Justice suggests that eviction claims are now above their pre-pandemic levels. Covering the period of January to March 2022, the figures show there were 6,447 claims by private landlords to evict tenants – some 3% higher than the same period in 2019, before Covid hit. Of these, 6,066 were accelerated procedure claims being made as a result of a Section 21 notice – some 63% higher than the last quarter and nearly a third (32%) higher than the same quarter in 2019, before the pandemic. Although this could also be attributed to a backlog of claims that may have been put on hold during the pandemic.
A Case For The Courts to Streamline the Processes for Landlords
Ultimately, the hope of landlords, tenants, and government alike is for a properly functioning private rental market. One in which tenants have fair protections and landlords have the security and confidence to invest. Active investment in rental properties enhances competition and helps to reduce rental prices for tenants. However, surveys suggest that Section 21 Reform is an additional factor contributing to a lack of investment and landlords leaving the market, further perpetuating the current supply and demand imbalance.
Alongside changes to the issuance of Section 21 Notices, the government must do more to support and streamline the court process for landlords. Following on from the pandemic, with evictions banned and many tenants building up significant arrears, many of our nation’s courts are clogged with a backlog of eviction cases. This is further exacerbated by a shortage of judges and county-court bailiffs, meaning that cases are taking months to be heard. Currently landlords must wait months upon months for a hearing and then, when possession is eventually granted, they must accrue further months of anguish waiting for a court-appointed bailiff. The government must do more to fund the system and support more efficient evictions if this is to be the only route to removing problem tenants going forward. This will mean further investment in expediting cases and providing additional resources.
References
National Association of Citizens Advice BureauxAdvice. (n.d.). If you get a section 21 notice. Retrieved from Citizens Advice: https://www.citizensadvice.org.uk/housing/renting-privately/during-your-tenancy/if-you-get-a-section-21-notice/
O’Leary, C., O’Shea, S., & Albertson, K. (2018). Homelessness and the Private Rented Sector. Residential Landlord’s Association (NRLA).
The Department for Levelling Up, Housing & Communities. (2022). A Fairer Private Rented Sector.
Wilson, W., Barton, C., & Cromarty, H. (2024). The end of ‘no fault’ section 21 evictions (England). London: House of Commons Library.
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