Section 21 Notice Abolished

Nikka Sulton

Section 21 Notice Abolished

The Renter’s reform bill will see the abolishment of Section 21 for new tenancies six months after its enactment as law. For existing tenancies, this change will take effect 12 months later, with Section 21 abolished from October 1st, 2024, for new tenancies, and from October 1st, 2025, for pre-existing tenancies.

What is a Section 21: A short summary

Section 21, part of the Housing Act 1988, permits landlords, mainly in Assured Shorthold Tenancies (ASTs), to evict tenants without stating a reason. Through a Section 21 Notice (Form 6A), landlords can issue a two-month notice to end the tenancy and reclaim possession, commonly known as a “no-fault” eviction. This provision is slated for abolition under the Renters Reform Bill.

Why will section 21 be abolished?

Section 21 is set to be abolished due to concerns over renter insecurity. Acknowledging the lack of tenant security and the deterrence of challenging poor conditions or unfair rent hikes, Michael Gove and the government are taking action. The Conservative Manifesto 2019 pledged a ‘better deal’ for renters, including the end of ‘no-fault’ evictions, aiming to empower tenants to challenge injustices without fear of eviction. This move reflects a broader commitment to reforming the rental market and ensuring fairer tenancy structures.

Furthermore, the Renters Reform Bill, proposed in both the 2019 and 2021 Queen’s Speeches, highlights the government’s intention to address issues like Section 21 and introduce measures to enhance tenant rights. While these reforms aim to provide greater security and protection for renters, some landlords argue that such changes could have unintended consequences. They suggest that the abolition of Section 21 is part of a broader government strategy to drive private landlords out of the market.

Additionally, landlords point to other policies, such as the elimination of mortgage expense deductions from rental income, which they claim make it less profitable to operate in the rental sector. This has led to concerns among small-time landlords about the viability of their businesses. As large investment firms acquire more properties, there are fears that the rental market could become dominated by institutional investors, potentially reducing housing options and affordability for tenants. These developments underscore the complexity of reforming the rental sector and balancing the interests of landlords and tenants alike.

How will section 21 abolition affect landlords

Data suggests that approximately 30% of landlords intend to downsize their property portfolios in response to the upcoming changes. As Section 21 disappears, landlords will find it easier to evict tenants when selling properties, potentially increasing the supply of homes for sale and impacting market prices. This shift, combined with heightened caution in tenant selection, could worsen the shortage of private rental properties.

Previously, Section 21 provided landlords with a straightforward and assured means of evicting tenants affordably. With this process set to vanish, landlords may adopt a stricter approach, leading to a rise in evictions before the change takes effect. However, the abolition of Section 21 may not benefit all tenants, particularly those facing rent arrears, who often prefer eviction under Section 21 rather than Section 8 due to concerns about rehousing support from local councils.

For those contemplating selling property in the UK, an instant, free property valuation tool is available to assess the current market value of your home.

What other new laws will be introduced by the renters’ reform bill?

Right to Request a Pet

Tenants now possess the legal entitlement to request a pet in their rental accommodation, with landlords prohibited from unreasonably rejecting such requests. Landlords are obligated to provide a written response within 42 days. Additionally, landlords have the authority to stipulate that tenants acquire pet insurance to cover potential property damage caused by pets.

Bans on Renting to Families and Benefit Recipients

Landlords are now prohibited from implementing blanket bans on renting to families with children or individuals receiving benefits.

Recovery of Possession

The Bill aims to assist landlords by streamlining the process of reclaiming properties from tenants engaging in anti-social behavior, falling into arrears, or relocating family members. It allows landlords to shorten the notice period for problematic tenants.

Ombudsman

The Ombudsman scheme, once obligatory solely for letting agents, will now be compulsory for all private landlords. The Ombudsman is empowered to enforce remedies, such as compensation of up to £25,000 and rent reimbursement for inadequate service.

Decent Homes Standards

Upcoming legislation will mandate rented properties to adhere to the Decent Homes Standard, though it’s absent from the initial draft of the Bill.

Rent Increases

Unjust rent review clauses will be terminated, limiting landlords to annual rent increases. Tenants will have the right to reclaim rent for inadequate properties.

Grounds for Possession

The current Section 21 system will be substituted with the updated Section 8 system. New compulsory grounds include persistent significant arrears, landlord or immediate family occupancy, and property sale. The discretionary ground for antisocial conduct will be revised to facilitate easier eviction under specific circumstances.

Transition to Periodic Tenancies

All tenancies will convert to periodic, terminating only if the tenant decides to depart or if a valid legal reason exists, eliminating the necessity for “no-fault” evictions under Section 21.