In April 2019 the government announced that it wants to “introduce a generational change to the law that governs private renting”. In July it opened an official consultation entitled, A new deal for renting: resetting the balance of rights and responsibilities between landlords and tenants. By the time you read this article that consultation will have drawn to a close (on 12 October).
The key proposals included the removal of the Assured Shorthold Tenancy (AST) plus the abolition of Section 21 (the no-fault eviction process). If these changes are adopted as planned it will be a landmark moment for the PRS. Both of these measures were introduced as part of the Housing Act 1988, to encourage investment into the PRS and to allow more flexibility for both landlords and tenants.
If Government goes ahead with its plans, it will mean that all new tenancies will either be an assured periodic tenancy, or an assured fixed term tenancy that would then revert by default to a periodic tenancy. Tenants will be able to end a tenancy with two months’ notice. However, landlords will only be able to end a tenancy if they can prove they have legitimate grounds under Section 8 of the Housing Act.
Give me a reason
Section 8 already gives a landlord several mandatory reasons to evict a tenant (see below). However, it doesn’t allow for a landlord that wants to move into the rental property for the first time or who wants to sell the property, but the government is considering an updated version of Section 8 that could allow this.
Equally critical for landlords is the process they need to follow if a tenant refuses to leave at the end of the notice period. Today, whether using Section 21 or Section 8, landlords need to make a court application for possession. However, while landlords using Section 21 can follow an accelerated possession process - making a formal court hearing unnecessary in many cases - landlords using Section 8 don’t have this flexibility.
Research by Paragon Bank found that the median time from claim to possession using the court process is currently 16 weeks and a survey of Paragon landlords showed that 85% feel this should be reduced to eight weeks or less. So the common fear among landlords at the moment, regarding the consultation, is that the eviction process could take even longer than it does already if Section 21 is abolished, and of course whether government will improve Section 8 to allow for eviction if the landlord wants to sell or move into the property for the first time.