No fault evictions: The End

The Government has yesterday published its response to the 2018 consultation “Overcoming the Barriers to Longer Tenancies in the Private Rental Sector”.

In what is hailed as the biggest change in the private rental sector for a generation, the Government promises significant reforms aimed at protecting tenants from unethical landlords and providing flexible and open ended tenancies for future generations of renters.

As part of an overhaul of the sector, proposals include:

• Abolishing Section 21 evictions in England.This will involve repealing this section of the Housing Act 1988. Under the existing legislation, the so called “No fault” evictions allow landlords to terminate a tenancy on giving not less than two months’ written notice.No reasons for terminating are required. The proposed reform will make it far more difficult for landlords to regain possession for premises let under Assured shorthold tenancies (ASTs). Whilst we await further details, the paper suggests a new framework where a landlord will always have to provide a reason for ending the tenancy, essentially creating ASTs with an indefinite term that can only be determined by the landlord on the basis of a reformed section 8 process (see below) or by tenants who will be able to choose to end the tenancy on provision of sufficient notice;
• Strengthening the Section 8 process.This is a “fault based” mechanism currently relied upon by landlords when seeking possession.The Government has said that it will strengthen the Section 8 route by amending the Housing Actto allow landlords to rely on it if they wish to sell the property or occupy it themselves;
• Speeding up and simplifying the Court process to make it easier for landlords to obtain possession;
• Freeing up enforcement agent (bailiff) resources to enable them to prioritise possession cases once the Court has granted a warrant for possession.

It is clear that these changes are aimed at addressing significant concerns at the reported numbers of “unfair evictions” said to be contributing to family homelessness and introducing measures to support concerned families who currently feel unable to complain to landlords about poor quality accommodation for fear of being served with a Section 21 notice terminating their tenancy on two months’ notice. However these changes will apply to all landlords not just those unethical landlords from whom the Government is seeking to offer protection.

The private rented sector has seen unprecedented growth in recent years with over 4 million people now estimated to be in privately rented accommodation. The Government’s view is that these changes will provide greater protection, security and flexibility for renters as it continues to identify broad reforms focused on delivering a better deal for the consumer in the residential housing market.

However, it will also cause very significant concern for landlords including mainstream private rented sector investors who already lack confidence in the existing section 8 route which is plagued with delays and inefficiencies and for whom the section 21 route has been fairly utilised to more promptly secure an order for possession where legitimately required to protect their investments. Likewise, commentators have already warned that a potential consequence of such reform could be a reduction in buy to let investment and the availability of funding as buy to let lenders may be less likely to lend if borrowers will now face more difficulty obtaining possession orders.

The Government has advised that further consultation will now follow as it seeks to build a consensus on the final package of reforms to be implemented.