In April this year, the Government announced its intention to end no fault evictions. With the consultation now published, the details of those proposals are now beginning to take shape.
The published consultation is wide-ranging and is described as a ‘generational change’ in residential lettings. The key proposal is the removal of ‘section 21’ evictions, which currently allow landlords to end a tenancy on expiry of the fixed term without giving a specific reason for doing so. Section 21 Housing Act 1988 has long been the first port of call for landlords looking to recover possession of their properties, offering them a flexible and (comparatively) cost-efficient means of ending tenancies.
As an alternative to section 21, landlords have always been able to use section 8 of the same Act, where they must prove one of a number of statutory grounds for possession. Making an order for possession on some of these grounds is discretionary and there has been the perception among some landlords that the courts have too often exercised this discretion in tenants’ favour (at the landlord’s risk of financial exposure).
Importantly, with the removal of section 21 the Government is considering broadening the range of section 8 grounds to offer landlords more flexibility in how they manage their properties. Perhaps most crucially, the proposals suggest that landlords should be able to recover possession so that they or their family members can live in a property, and so that they can sell the property. If introduced, these grounds would be a significant comfort for landlords, particularly as many landlords in the sector are private individuals with one or two buy-to-lets who need to retain flexibility over their investments.
The consultation also touches on the court system, recognising that on average it takes landlords five to six months to recover possession (often while receiving no rental income and paying out legal fees). Issues with delay in the court system go beyond housing possession, but the Government is considering whether certain section 8 grounds could be dealt with via an accelerated procedure, with claims considered without a hearing in straightforward cases. As section 21 already has an accelerated procedure, broadening it to include section 8 would prevent the removal of section 21 increasing landlord’s costs.
One area the consultation does not address in any detail is property standards. Landlords are required to provide tenants with gas safety information, energy performance information and information on renting in England. The key mechanism for ensuring landlords provide this information is prohibiting them from serving a valid section 21 notice if they do not do so. With section 21 being removed, there is a question mark over how these obligations will be enforced, which (surprisingly) the consultation does not consider. One possibility is tying compliance to the validity of section 8 notices, but that could mean delaying or preventing landlords from recovering possession even if there are breaches of a tenancy agreement, which would be unpopular.
If the proposed changes go ahead, it will represent a significant re-balancing of power towards tenants, reflecting the considerable growth of the private rented sector over the last decade.