Landlords: Axing Section 21 will see assured shorthold tenancies abolished

 

The government has published its consultation on abolishing Section 21 of the Housing Act, but plans to scrap the UK’s most common tenancy contract are causing a stir.

Section 21 notices, also known as “no fault” evictions allowing landlords to remove tenants from their properties without giving a reason, are set to be scrapped by the government, and a new consultation paper sets out more details on how this will play out for the industry.

Titled A New Deal for Renting, the consultation’s aim is to “reset the balance of rights and responsibilities between landlords and tenants”, but the paper unveils a significant change to the country’s private rented sector – scrapping assured shorthold tenancies (ASTs), which would affect most rental contracts in the UK.

Prior to this report, the government had long been discussing its intention to abolish Section 21 eviction notices. At present, landlords can invoke Section 21 to reclaim their properties without giving a reason for eviction, provided they meet certain criteria such as being more than four months since the tenancy started and a two month notice period is given.

Often, landlords have been falling back on using Section 21 rather than Section 8 in cases where tenants had broken tenancy agreements (such as missing rent payments or causing significant damage to the property), as it was seen as a more straightforward option with properties handed back to landlords quicker than the court process involved when using a Section 8 notice.

When Section 21 is abolished, landlords will be required to provide a “valid reason for taking back possession of the property and would need to be able to satisfy a judge of the validity of their claim”.

Most common type of tenancy contract to be scrapped

However, in order to abolish this eviction method, the government consultation states: “We intend to deliver the intention to remove section 21 by removing the assured shorthold tenancy regime. Section 21 notices can only be served under assured shorthold tenancies – the most common form of tenancy in the residential rental sector. Once we abolish section 21, there is no longer any significant legal distinction between an assured shorthold tenancy and an assured tenancy.”

Fortunately for landlords, the consultation also states its intention to improve the implementation of Section 8 of the Housing Act, meaning they will still have the power to remove tenants where necessary – and in theory, this should become easier.

Under a Section 8 possession notice, landlords can evict a tenant under certain conditions, normally where a tenant has breached the terms laid out in the tenancy agreement. This could include rent arrears or repeated late payments of rent, but it can be a long drawn out process through the courts at present.

The paper states: “Our aim is that wherever a section 21 notice would have been appropriate to use, an appropriate section 8 ground can be used instead.”

Landlord concerns should be listened to

Chris Norris of the National Landlords Association supports the changes proposed by the government.

“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 wants 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,” he added.

Proposed improvements to eviction process

The consultation states that while landlords need to have powers to evict tenants who break tenancy agreements, they must also have the option to take back their property to move back into themselves (or for their families), or to sell the property.

The government promises that the current average time of 22 weeks for private landlords to regain possession of their properties will be “much shorter”, while a new online system will be launched to “speed up and simplify the court process for landlords”.

Across the board, many landlords complain that they have had to use Section 21 “no fault” eviction notices to remove tenants from their properties due to the time-consuming and overly complicated process of using a Section 8 notice instead. The hope is that through this consultation, despite the removal of Section 21 entirely, landlords will ultimately end up with a better and fairer option when it comes to regaining their properties, and one that will be fairer for tenants, too.

Highgrove Mews

High Net Yield Freehold Houses

  • Commutable to London (27 mins to central Paddington station)
  • Rental demand extremely strong with large industry presence in Reading
  • Freehold with 4% net yield

£284,955 - £457,000

St Petersgate – Stockport Manchester

New Launch - Stockport Manchester, apartments from £160,000

  • Discounted launch prices from £160,000
  • Excellent transport links with 3 trains per hour to London Euston and only 9 mins journey to Manchester Piccadilly
  • Experienced development team

Assured Rent Housing Association Leases

Assured Rent Housing Association Leases

  • Assured rent & no rental voids
  • Tenant damage cover & newly refurbished inline with requirements of a corporate sitting tenant
  • Free property and lettings management

From £62,000

Emerging Birmingham Commuter Town With Properties From Just £104,000

The emerging Birmingham commuter town where properties are selling in an average of just 24 days

  • A collection of 62 two bedroom apartments and 28 one bedroom apartments.
  • DE14 is one of the fastest selling postcodes in the West Midlands.
  • 23 minute train journey into Birmingham New Street Station.

Properties from £104,000

Mill, Stockport

The Northwest's emerging property hotspot

  • Discounted off-plan 2-bed prices from £162,000
  • Completion date - Q4 2021
  • Rental yields - 6% plus

Discounted off-plan 2-bed prices from £162,000

South Central – Birmingham City Centre Apartments

Highly anticipated 28 storey launch in Birmingham City Centre with an impressive roof garden and communal facilities.

  • 154 units across 28 storeys
  • Residential multi-media community room, gym, roof garden and sky cinema
  • Excellent future connectivity via the metro system to other key transport hubs and locations around the city

from £205,800

ba-

Talk to us

Speak to our UK property experts today: 

+44 (0) 333 123 0320

Open from 9am-6pm GMT

+852 9865 4446

Open from 9am-6pm HKT

Stamp Duty Calculator

.

Unlock members only investment opportunities and full development details. Join now – it’s free, quick and easy.

Login

Not a member? Sign up for free

eviction

Landlords: Axing Section 21 will see assured shorthold tenancies abolished

Example

By submitting your details via this online form you agree to be contacted via email/phone/SMS by Direct Marketplace Ltd t/a BuyAssociation in relation to property investment and property developments . We do not share your personal details with third parties.  To view our full Privacy Policy click here.