15 April 2019

It will be announced today by the Secretary of State for Housing, Communities and Local Government, James Brokenshire, that landlords will lose the ability to repossess their properties using Section 21.

Section 21 under the Housing Act 1988 is a no fault-based notice that may be given to tenants at the end of the fixed term or any time thereafter giving them two months’ notice that they would like the tenant to leave. Landlords do not have to give a reason for doing this.

Because of the huge growth in people renting, the ease with which landlords can regain their property is causing concern amongst renters and is the leading cause of homelessness.

Proposals are that the landlord will only be able to evict tenants if they are in rent arrears or have breached the tenancy even, it would seem, at the end of the fixed term.

In a recent press release from Mr Brokenshire said:

“By abolishing these kinds of evictions, every single person living in the private rented sector will be empowered to make the right housing choice for themselves – not have it made for them. And this will be balanced by ensuring responsible landlords can get their property back where they have a proper reason to do so.”

The single route to possession will be under Section 8 of the Housing Act 1988 which allows landlords to re-possess their properties where there are breaches of the tenancy. This is likely to be overhauled with additions and amendments to the grounds available to evict a tenant. It is proposed that there will be an additional ground where the landlord can seek possession where they want to sell the property.

Initial thoughts are that this may dissuade landlords from investing in new homes and with the increase in renters in the UK, 11 million in the private rented sector, this could lead to a housing shortage.

Landlords’ associations are advising caution and proposing that the overhaul of the grounds for possession such as rent arrears, tenant anti-social behaviour and the landlord wishing to sell are in place before Section 21 is abolished.

There is a concern that landlords will simply hike up rent to force the tenant out. No doubt this will be addressed.

The current requirements on landlords to ensure that a Section 21 Notice is valid will have to be re-thought as they do not currently apply to Section 8. As a reminder, they are:

· The deposit must have been secured in a tenancy deposit scheme and the prescribed information given to the tenant within 30 days of receipt
· An energy performance certificate must have been given to the tenant with an energy rating of E or above (property with an energy rating below this will not be permitted to be rented out unless there is an exception)
· Gas safety certificate must have been given to the tenant before the start of the tenancy and these must remain renewed every twelve months
· A government DCLG booklet: How to Rent Guide must have been given to the tenant
· If the property is a house in multiple occupation (HMO) a licence must be in place
· It must not be a retaliatory eviction i.e. the tenant must not have complained about the disrepair of the property and the landlord not deal with it appropriately followed by an improvement notice made by the environmental health department local authority environmental health department.

The small benefit proposed for landlords is that the court process will be expedited so landlords will be able to swiftly and smoothly regain their property where there are breaches of the tenancy.

It was announced last Friday (12th April) by the First Minister in Wales that the Welsh Government will be banning Section 21.

No date is yet set for when Section 21 will be abolished but there is a sense of urgency from the Government’s point of view.

For advice on any tenancy issues, contact our landlord and tenant specialist Jacqui Swann.