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EXPERT COMMENT: Proposal to Abolish No-Fault Evictions

Mike Gossage

The government has announced that it plans to hold a consultation on scrapping no-fault evictions. This is following rigorous campaigns to improve the rights of tenants following a sharp increase in the amount of people being made homeless in recent years.

Currently landlords can seek possession of properties tenanted through an Assured Shorthold Tenancy (‘AST’) via two main procedures:-

1. Expiry of the fixed term. This is when the initial term of the AST has come to an end and the tenant is ‘holding over’ on a rolling tenancy. This entitles the landlord to serve a two month notice for the tenant to give up possession. This is known as the ‘Section 21’ procedure with reference to the Housing Act 1988.

2. Breach of the tenancy agreement. The most common example is the tenant failing to pay rent. This is known as the ‘Section 8’ procedure with reference to the Housing Act 1988.

 

 

The Section 21 procedure is what the consultation will focus on. Theresa May has commented as follows:-

Millions of responsible tenants could still be uprooted by their landlord with little notice, and often little justification. This is wrong and today we’re acting by preventing these unfair evictions. This important step will not only protect tenants from unethical behaviour, but also give them the long-term certainty and the peace of mind they deserve.

While I have no doubt that the motive behind such proposed changes is sincere and seeks to tackle a genuine and serious issue, I am not so sure that the proposals will have the desired effect. The government’s current housing stock is insufficient to deal with the level of demand for properties. Social housing waiting lists are huge and the government is unquestionably reliant on private landlords.

The requirements of private landlords have increased significantly over the past 5 years.

I agree with many of the changes implemented. It is only right that landlords comply with regulations to ensure the properties are safe and fit for purpose. However, there are some requirements that are questionable, such as selective landlord licensing. This allows local councils to charge private landlords up to £600 per year with seemingly little to no benefit to either the landlord or the tenant.

Given the recent changes, I have seen landlords folding their portfolios. The increased costs of renting properties plus the costs of evicting tenants (which are almost always unrecoverable) means that in many cases renting properties is no longer a viable business. With the Section 21 procedure potentially being taken off the table, I deem it likely that more landlords will look to sell their properties and there will be fewer prospective landlords seeking to rent properties.

People may have little sympathy for landlords in that respect. However, the folding of private portfolios is leading to a depletion of the amount of properties available for rent. With the government already so reliant on the private landlord sector then, regardless of your opinion of landlords who rent properties as a business, it would seems that the proposed changes could exacerbate the problem even further.

What appears clear to me is that the government will need to consult on this issue very carefully before enacting such changes. Opinions from across the board will be necessary and a transition period should be allowed so landlords can plan accordingly and there aren’t a huge amount of Section 21 notices being served before a short notice deadline.

Perhaps a middle ground is more suitable; with landlords still being allowed to use the Section 21 procedure but there being a longer notice period. Only time will tell as to what the government deems to be appropriate. What is certain is that if the Section 21 procedure is scrapped then this will be a seismic change to housing law.

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