Last month the ‘End Unfair Evictions Coalition’ delivered a petition to the Secretary of State for housing demanding the abolition of Section 21, arguing that all tenants should have “an automatic right to remain in a property indefinitely unless they break the terms of the contract”.
Now, in what has been labelled the “biggest change to the private rental sector for a generation”, the UK government has announced plans to abolish ‘no-fault evictions’ that were introduced under section 21 of the 1988 Housing Act. They will also be consulting with both tenants and landlords from the private rental sector in order to develop a new deal for renting.
What Is a Section 21 Notice?
Currently, private tenants living in rented accommodation can be served a section 21 notice at any time during their period of occupancy provided that their initial fixed term contract (of usually 6 months or a year) has ended and the contract has automatically rolled over into a periodic tenancy. The landlord does not need to give a reason for serving a section 21 eviction notice.
Why Abolish Section 21 Notices?
The problem that the current legislation creates is that it gives landlords great power over tenants. They may feel unable to complain about problems at the rental property such as things that need repairing, large rent increases or any other problems in case it leads to them being kicked out.
Privately renting tenants are often left feeling as though they are living under the constant threat of being evicted. Landlords are usually able to pay their mortgage or take some income from rental payments so privately renting tenants should have the right to live with a feeling of security, free from the worry of being evicted for no reason.
What the Government Says About ‘Unfair Evictions’
The government says that Section 21 evictions served on private tenants are one of the biggest causes of families being made homeless across the UK and that these new proposals would mean that private landlords would have to provide a ‘concrete, evidenced reason’ for ending a tenancy whilst still be able to regain their property should they wish to sell it or move into it themselves.
|Prime Minister Theresa May said: “Everyone renting in the private sector has the right to feel secure in their home, settled in their community and able to plan for the future with confidence. But millions of responsible tenants could still be uprooted by their landlords with little notice, and often little justification.”
“This is wrong – and today we’re acting by preventing these unfair evictions. Landlords will still be able to end tenancies where they have legitimate reasons to do so, but they will no longer be able to unexpectedly evict families with only eight weeks’ notice.“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.” Source – MoneySavingExpert.com
Other parts of housing laws deal with at-fault evictions so the abolishment of Section 21 will not mean that landlords won’t be able to take action against tenants that fail to pay rent or damage the property.
How Could This Affect The Private Rental Market?
The abolishment of section 21 notices will put an end to private landlords evicting tenants from their homes with as little as 8 weeks’ notice after the fixed-term contract has come to an end. Although this sounds like a positive step for private tenants that would benefit from the extra security that this offers, if the Government removes a landlord’s right to evict tenants by giving two months’ notice, some of the most vulnerable renters may find that it becomes even more difficult to find private landlords willing to rent a property to them.
The Government is also considering introducing minimum three-year private rental tenancies, which could prompt some landlords to exit the rental market because of the extra risk. This could lead to a potential shortage of properties and with less rental homes, the landlords that do choose to stay in the private rental market will be able to pick and choose from the best tenants. Renting out a property is a business venture and landlords are not likely to let a property to someone who might struggle to pay the rent if there are potential applicants that appear more financially stable.
Will this Affect my Landlord Insurance?
Most landlord insurance claims are typically made once a tenant has vacated the property leaving behind some type of damage. The abolishment of section 21 notices will likely see a reduction in the number of tenant evictions, which should, in turn, reduce the number of insurance claims being made by landlords. If this does happen then the knock-on effect could ultimately be cheaper insurance premiums for landlords.