Emma McGowan, Welfare Benefits Caseworker Supervisor at NLS Legal https://www.ntu.ac.uk/staff-profiles/law/emma-mcgowan
‘I’ve heard the government are getting rid of section 21 notices?’
I cannot count the number of hopeful clients, faced with eviction and homelessness, who have uttered this over the years. The frustration is clear; it is hard to understand how you have ended up in facing eviction when no reason for eviction has been, or even had to be, given. You, as a tenant, need not have done anything wrong. Section 21 notices ask a tenant to leave a rented property in at least two months’ time. Currently, they can be served on a tenant after four months living in the property. After almost a decade advising on housing law, I am sure you will forgive me for having grown cynical about the prospects of this often-discussed change actually coming to fruition.
Landlords have often pointed to the onerous procedural requirements they have to fulfil before being able to serve the tenant with a section 21 notice. These include gas safety conditions, energy performance certificates and proper deposit protection. However, seen from the tenant’s perspective, these are statutory requirements their landlord was always supposed to have in place. In return for their landlord fulfilling the minimum requirements of their job, tenants lose their home, with two months’ warning, for no apparent reason. They are then faced with finding a new home in an increasingly competitive market.
Imagine my surprise when, over the summer, we got a new government, and with it, a new set of proposed legal reforms. The third reading of the Renters’ Rights Bill (‘the Bill’) is due in December 2024 with a plethora of proposed changes to housing law and, perhaps, an accompanying shift in my previous cynicism.
The end of ‘no fault eviction’?
The first rule of housing law is to advise your client on their security of tenure; what rights do they have to stay in the property? The Renter's Rights Bill, if it is to gain Royal Assent, will bring considerable changes to this issue and potentially changes in favour of the tenant. It will impact almost everyone living in privately rented accommodation (apart from, at present, university owned student accommodation).
Assured Shorthold tenancies will be abolished in favour of Periodic Assured tenancies (rolling tenancies with no fixed end date), with a rental term of no more than one month. In addition, it is proposed that tenants can give their landlord not less than two months’ notice of their intention to leave the property. This notice period sits at odds with the new one-month periodic tenancy. This discrepancy has been explained as allowing the tenant more time to find alternative accommodation, while allowing landlords more time to re-let. In turn, landlord’s will only be able to evict for specific reasons, each with its own evidence requirements and notice period.
So, no more ‘no fault’ evictions. The Bill does seem to be re-framing the balance in favour of tenants in respect of possession matters. However, additional changes are also set out, which need to be considered in the round.
Other Proposed Changes
The string of additional proposed changes include provisions to strengthen the penalties for illegal evictions, to prevent rental bidding wars, and to only allowing rent increases during a tenancy on an annual basis.
Importantly, and following many publicised issues and tragedies, Section 10A Landlord and Tenant Act 1985 (also colloquially known as ‘Awaab’s Law’) will be extended from the socially rented sector to private tenancies. Landlord’s will be required to address certain disrepair hazards, specifically damp and mould, within a specific timeframe.
For us animal lovers, landlords will not be able to unreasonably reject a tenant request to have a pet without facing a potential challenge to this decision. The actual process of making such a challenge is unclear and the potential effectiveness is yet to be determined. Perhaps this was one of the more headline-grabbing changes which may lack substance in reality.
Unintended consequences?
The government tells us the aim of these changes is to make tenants feel more secure. It is hoped this will result in longer tenancies and boost rental demand, perhaps even reducing or stabilising rent figures in those high demand areas.
From a landlord’s perspective, these changes will come with a cost. The government has estimated the impact will cost landlords some £12 per property each year. The National Residential Landlords Association have pointed out that this annual cost of £12 per property is only part of an estimated £33million cost to businesses in the UK each year. This, together with the inevitable uncertainty that such sweeping changes often bring, is causing landlords to issue a record number of section 21 notices before the new reforms are introduced. The knock-on effect for an already overburdened court system is already being felt, and tenants are also being impacted as they continue to seek an increasingly elusive affordable home.
The reforms may also lead to unintended consequences for those living in shared ownership housing. In shared ownership the homeowner owns part of their house and rents the other parts out through a social housing provider. The mechanism for this rented section is through an assured shorthold tenancy. The Bill’s changes mean that landlords may only be able to get possession of this type of property through forfeiture; a lengthy, technical, and expensive process for all involved.
Under the Bill, discriminatory practices will be banned such as those that allow tenants to be rejected if they are in receipt of benefits or who have children. But what of right to rent checks? Having to provide proof of your nationality and/or immigration status has already tilted the market in favour of those with the easiest to access and clearest documentation, i.e. those with a British passport. Under the proposed reforms, such checks will be allowed to continue. This leads to an obvious result; fewer houses rented to fewer sections of society.
Conclusion
Overall, the changes presented in the Bill seem broadly positive for tenants, even if the short-term consequences have the potential to increase tenants’ distress. With the increase in section 21 notices, it appears that the rental market is already suffering with stories of landlords selling up thereby reducing the number of available rental properties, this will only get worse if more landlords are to sell up after current notices are enforced.
It cannot be denied that this is a strong attempt to rebalance renting in favour of tenants. It has also gone a long way to dispel my long-held cynicism. A long way, but by no means a completed journey. The changes brought to the possession and enforcement mechanisms will invariably increase the workload of tenant housing lawyers. In that regard, one glaring problem remains; the combined issue of the lack of legal aid and the dwindling number of housing lawyers left to do this work. If people do not know their rights, they cannot be expected to enforce them, not matter what changes are brought in.
Further Reading:
Nigel Lewis ‘Lawyer questions Labour’s ‘fanciful’ cost estimates for reforms’ (LandlordZone 26 November 2024)
Jerome Smail ‘Renters’ Rights Bill to cost £33m, according to assessment’ (Property Industry Eye 26 November 2024)
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