A new deal for renting?


Share

On 15 April 2019, the Government announced that it will put an end to so-called ‘no-fault’ evictions by repealing section 21 of the Housing Act 1988. In July 2019 the Government published its consultation ‘A New Deal for Renting’ which invited comment on this controversial decision.

This consultation was not about whether to abolish section 21 (the decision having been made), but how to abolish it. The deadline for responding to the consultation was 12 October 2019. At the time of writing the Government has not yet responded.

Assured shorthold tenancies (ASTs) under the Housing Act 1988 are the second largest housing tenure in England, housing 19% of all households (4.5 million households). The premise behind the consultation is that the housing landscape has changed since the Housing Act 1988 came into force and the use of section 21 to evict tenants without reason or avenue for challenge is no longer fair or transparent. Instead, clear reasons should be given for the decision to evict. Tenants should be able to rent with the certainty that they will not be asked to leave without fair reason. Landlords ‘will be supported to provide the safe, secure, and decent homes the nation needs’ and ‘can swiftly take action when things go wrong, through a redress system that works, and works fairly’. This of course relies on such a system being put in place.

The intention is to abolish section 21 by removing ASTs from the Housing Act 1988. All future tenancies will be assured, either fixed-term assured tenancies or contractual periodic assured tenancies. But where the fixed term ends and the tenant fails to leave, the tenancy automatically rolls onto an assured tenancy and so the landlord would still need to seek possession if they required the tenant to vacate.

While the Paper refers to the possibility of including a break clause, in practice this would only be exercisable by the tenant and the landlord would still need to seek possession if the tenant refused to leave.

Under the new framework, a landlord will always have to provide a reason for ending a tenancy, such as breach of contract. The Government intends that any changes to section 21 legislation will be accompanied by enhanced grounds for possession under section 8, and a simpler, faster process through the courts.

The consultation discusses several changes to section 8 grounds including:

  • introducing a new ground when the landlord wants to sell the property and widening the ground for wanting to move into it;
  • amending the current mandatory ground 8 (rent arrears) so that landlords need two months’ arrears on notice, and one month’s arrears at the time of the hearing;
  • strengthening ground 13 to cover tenants who routinely refuse access for repairs / safety checks; and
  • the possibility of strengthening anti-social behaviour grounds.

Tenants would still be able to end the tenancy by giving sufficient notice to their landlord.

The prescribed information requirements for the valid use of section 21 (e.g. Gas Safety certificate, tenancy deposit information, EPC, and How to Rent) are intended to be applied to the section 8 process.

The purpose of all of this is to deliver a fairer, more transparent tenancy and possessions regime, while creating a simpler, faster process through the courts. But can it deliver?

The Paper states that the Government is working closely with the Ministry of Justice and the courts to reduce average case times. The Ministry of Justice is also looking to free up bailiff resources to help them prioritise possession cases to reduce delay in enforcement. A new online system to speed up and simplify the court process for landlords is intended, as is an accelerated process for possession for mandatory grounds (unless the tenant challenges it).

The changes are not intended to be retrospective, so any ASTs existing at the date the law comes into force will continue and the section 21 route for possession can be used. When the tenancy ends, it is intended that any new tenancy agreement will be assured.

The Government is minded to have the changes apply to both private and social landlords, but asks for views on this. In the case of the latter this has implications for fixed term tenancies introduced by the Localism Act 2011, starter tenancies and introductory tenancies, and demoted tenancies.

The deadline for responses to the consultation was 12 October 2019. Views were sought amongst other matters on whether there are any circumstances in which a landlord should be able to recover possession if a tenant is not at fault and how the court process could be improved.

This consultation was published on 22 July 2019. Two days later, Boris Johnson became Prime Minister resulting in a cabinet reshuffle. There is a new Secretary of State for Housing, Communities and Local Government, Robert Jenrick, and new housing minister, Esther McVey. It is not yet known how strongly the new cabinet will support the abolition of section 21. The outcome is therefore not clear, although it is notable that proposals have received crossparty support to date. If legislated, it is unlikely to come into force until at least late 2020.

Insight

Landlord's Certificates under the Building Safety Act 2022 – what do landlords need to do?

Explore
Insight

Trowers' property litigation weekly update

Explore
Insight

Webinar: Sustainability and the Capital Markets

Explore
Insight

Building Safety Act 2022 update: The Building Safety Levy consultation

Explore
Insight

Building Safety Act 2022 (Commencement No. 3 and Transitional Provision) Regulations 2022

Explore
News

Trowers bolsters Real Estate Investment & Development offering

Explore