In case you missed it, the Government has announced plans to end Section 21 evictions. They promise “the biggest change to the private rented sector in a generation”.
Section 21 allows landlords to evict tenants without giving any reason (e.g. without proving rent arrears) and is seen as the fastest way to end a tenancy once the initial term has expired.
This is everything you need to know about the announcement.
The Facts: What Happened?
On Monday, 15th April, theGovernment announced it will scrap Section 21 evictions in a “complete overhaul of the sector”. There will be a consultation on how to do this.
This move followed a debate in Parliament in December 2018, where MPs discussed the use of Section 21 in the private rented sector (PRS).
The debate was sponsored by Karen Buck MP, who you may recognise from the Homes (Fitness) Act which passed the same month and enables tenants to sue landlords who don’t maintain their properties. Full guide to that here.
Section 8 and Section 21 evictions are the only two ways that a landlord can unilaterally end a tenancy. When Section 21 is gone, that means landlords will be relying solely on Section 8.
Section 8, then, is key to the new plans. It will be “amended… so property owners are able to regain their home should they wish to sell it or move into it”.
(Bizarrely, Ground 1 already allows for landlords to take possession of the property as their own home, so presumably the Government means that they will be making this process more robust than it currently is?)
So although the headlines have been that Section 21 is scrapped, it is Section 8 that will be doing the legislative legwork. To satisfy the landlord lobby, every appropriate reason to evict a tenant will now need to be added as a ground for eviction within the Section 8 process.
This is why it’s so important that there is a full discussion between landlords, tenants and government, so that all foreseeable reasons can be included, without undermining the overall goals of the bill.
As soon as the details of the consultation emerge, we will share them so you can have your say. In the meantime, why not let us know what you think with a comment here.
The average time from making a possession claim to a county bailiff repossessing the property is currently 16.3 weeks. If you add the 8 weeks of notice period, that’s 24.3 weeks, or 170 days from eviction notice to empty property. It’s hard to imagine this time improving when Section 21 ends, unless serious reforms to the courts are made.
Perhaps with this in mind, the Government promised to “expedite” court processes to ensure evictions and other disputes are resolved faster. They imply, but do not promise, that this means a new, specialist housing court.
Aconsultation for creating such a court as launched in 2017, and the report is due soon. Its findings will be crucial.
What Is the Rationale for Scrapping Section 21?
The move comes after a report called Overcoming the Barriers to Longer Tenancies in the Private Rented Sector, which has scrapping Section 21 as its main recommendation.
The Government line on this big overhaul focuses on giving tenants security of tenure.
Particular notice is paid to the eight-week notice period that landlords can give tenants, which many groups have pointed out is too short a time for a family to find a new home, and has left many facing homelessness. This graph shows the association between PRS evictions and homelessness.
The Ministry for Housing, Communities and Local Government is also keen to stress the “balance” of the plans vis-a-vis improving Section 8. Yes landlords are losing Section 21, but they will gain a better Section 8 process.
It is clear however that the plans will drastically cut landlords’ powers to evict tenants, by removing the relatively smooth, accelerated Section 21 process.
What Has the Reaction Been?
The Landlord/Industry Reaction
On the one side, a big backlash from the landlord-industry group coalition, who are warning of a decline of PRS stock, throttling of housing investment and unforeseen consequences such as a sub-market of short-term lets that don’t use ASTs.
Landlords Aren’t Battling their Case Very Well
The point that is being raised time and again by landlords is that Section 21 is used to quickly evict tenants when they have already proved to be problematic, for example when they have large rent arrears.
Even though this is true, this argument is not going to work. Their opponents will say that if there are such valid grounds, then landlords can use a Section 8. And if it’s too slow to evict via Section 8 now, then it won’t be after the reforms.
Whether Section 8 will be sped up enough will only be known for sure after it’s too late to go back to how things are now.
Another argument that landlords need to drop or refine is that ‘tenants prefer flexibility’ so there’s no need to give tenants longer tenancies.
This is true, but when landlords say this they are assuming an equal right to end the tenancy: i.e. the tenant can serve notice, but so can the landlord.
But tenants can simply say, “yes I like being able to serve notice, but I don’t want the landlord to be able to serve notice on me!” This way they get their flexibility and stability. Landlords will say that this asymmetrical arrangement is not fair, but unless they can persuade people that this is unfair, then the ‘tenants prefer flexibility’ argument won’t convince anyone.
The Tenant Advocate Reaction
On the other side, a coalition of renters, consumer groups and activists are celebrating the news as a big victory.
Generation Rent, Shelter, the London Renters Union and many more groups have been campaigning for the end of Section 21 with a concerted campaign over the last 12 months.
The campaign signed up support from local authorities, London councils and Sadiq Khan. Here is the Section 21 coalition having a well-earned break:
Bonus: General Media Hysteria
Landlord and Sky News presenter Jayne Secker has gone viral with this interview of a tenant who has been evicted via Section 21.
What Happens Next?
There are two main possibilities that we can see.
Scenario 1: Section 8 to the Rescue
Section 21, along with Section 8, is one of the two ways landlords can unilaterally end a tenancy.
That means that after this reform, landlords will presumably only be able to use the Section 8 process to evict tenants. That is, landlords will always need to be able to demonstrate a ground for eviction exists.
So the assumption everyone is making is that Section 8’s grounds will be revised and expanded, and the eviction process will be sped up and optimised. Presumably it will also be getting used much more, so courts will need to have extra resources to handle the increased throughput.
Scenario 2: Rip it up and Start Again
Alternatively, the Government may tear down the entire edifice of the Housing Act (1988). They have, after all, promised “the biggest change…in a generation”. This could mean sweeping housing reforms including rent controls, a new contract to replace Assured Shorthold Tenancies (ASTs) and strict, universal landlord licensing.
This may seem farfetched, but some moves have already been made in this direction. For example, in February the Government announced they plan tocreate a redress scheme that all landlords must join.
Get off the Fence, OpenRent!
In these circumstances, landlords with any valid reason to evict a tenant would be able to do so in a straightforward way. Tenants who pay on time and look after the property will be able to feel safe in their tenure. There’s no reason, if these reforms are done properly, that creating more security for tenants has to lead to good landlords being penalised.
A full guide to Scotland’s rules is here. Keeping up to date with how the sector is performing in Scotland might be the best crystal ball we have.
When Will This Be Decided? What’s Next in the Timeline?
The first thing to look out for will be the report of the consultation for the new Housing Court. The consultation ended in January, so we can expect a report soon.
If the report comes out with a strong recommendation for a new Housing Court and something like an accelerated process for serving some Section 8 notices, then that’s a strong sign that the Government will be going down the Section 8/Scotland route.
After that, it’s not clear what could happen. There is no timeline and there are no manifesto promises to provide a roadmap. The House of Lords has had a huge sway over recent housing legislation and the executive is struggling to control the Commons.
But there is also great electoral uncertainty. It’s not clear which party(ies) will be in power in a year’s time, let alone who their leaders will be or their housing ministers. A new government could easily reverse or expand the recommendations made in Overcoming the Barriers to Longer Tenancies in the Private Rented Sector.
The whole scene is fraught with ambiguity, uncertainty and unclear policy preferences.
Do I Need to Do Anything? Can I Still Serve a Section 21 Notice?
You don’t need to do anything at all yet. If you want to have your say, on the measures, you can vote here.
Yes, you can stillserve a Section 21 notice and you will be able to for a long while yet.
We don’t think the changes will be fully announced for at least a year or two, and their implementation will take much longer than that. So for the short-term, things will continue as usual.
The Housing Act 1988 set the tone for UK housing for three decades. However these new reforms end up, we’re going to be living with, and in, the consequences for a long time.
We need to get this right!