SECTION 21: DELAYS TO COME FOR ENDING NO FAULT EVICTIONS?

The Renters (Reform) Bill is set to abolish Section 21 notices. However, recent concessions means there may be delays.

A main commitment of the upcoming Renters (Reform) Bill is to abolish section 21, which is also known as a "no-fault eviction" notice. To help landlords to recover their property, the bill outlines plans to strengthen other grounds under section 8.

The Renters (Reform) Bill is one of the most significant pieces of legislation for the private rented sector in the past 30 years. The abolition of section 21 has been a longstanding commitment of the bill and is the headline theme that is often reported in the press.

However, just before the bill's second reading in October 2023, the government stated that the courts process would need to make "sufficient process" before section 21 coul abolished. This likely means there will be delays to abolishing section 21, with Letting Agent Today dubbing the move a full "U-turn". 

Sign up for our webinar Experts react: The Renters (Reform) Bill second reading on Wednesday 25 October at 10am to find out more about changes to Section 21.

Here's a breakdown of what you need to know:

• What is section 21?
• What's changing for section 21?
• Why is section 21 being abolished?
• What do these changes mean for landlords and tenants?
• What will replace section 21?
• How will the new system be enforced?
• When will section 21 be abolished

What is section 21?

A section 21 notice allows a landlord to evict a tenant by providing them with two months' notice once their fixed term contract has come to an end. 

Landlords aren’t required to provide their tenants with a reason for the eviction, hence the phrase “no-fault” eviction. In contrast, to serve a section 8 notice, the landlord needs to prove that the tenant has broken the terms of the tenancy agreement.

What's changing for section 21?

Plans to abolish section 21 eviction notices were first set out as far back as the Queen's Speech in 2019, under the Renters' Reform Bill. These plans were confirmed in the new A Fairer Private Rented Sector white paper in 2022.

A main aim of the bill is to simplify tenancy structures by transitioning all tenancies to periodic contracts. This means that a tenancy will end only if the tenant chooses to leave, or if the landlord has a valid reason, as defined by law through section 8 grounds.

Section 21 would therefore no longer be required, which would put an end to these so-called “no-fault evictions”. 

Read more about how the expected changes have already affected landlord behaviour and the lettings market. 

Why is section 21 being abolished?

Michael Gove has previously shared that, under current legislation, some renters face "a precarious lack of security" - especially in terms of section 21 "no fault" evictions.

The government also found in its A new deal for renting: government response
that section 21 evictions led "some tenants to feel reluctant to challenge poor standards due to risk of eviction without reason." 

The new rules therefore aim to empower tenants to "challenge poor practice and unfair rent increases without fear of eviction."

What do these changes mean for landlords and tenants?

After section 21 is abolished, landlords will always need to provide their tenants with a reason for ending a tenancy, for example: a breach of contract or wanting to sell the property.

However, tenants will be able to choose to end the tenancy at any time, as long as they provide two months' notice to the landlord.

The 2022 white paper outlined that this would also help student tenants who may not wish to move out at the end of the academic year, for example, as they will also be included in the scope of the reforms and will get the "same opportunity to live in a secure home and challenge poor standards" as private renters. 

You can read an overview of how the plans to change section 21 have already affected the sector in our blog. 

What will replace section 21?

The government aims to strengthen the grounds for possession under section 8 of the Housing Act 1988. This will allow landlords to recover their property in reasonable circumstances.

After a tenant has lived in a property for six months, landlords will be able to evict a tenant under "reasonable" circumstances under section 8. This includes:

• Redevelopment
• Wanting to sell the property
• Allowing a close family member to move in to rent the property

The ground for anti-social behaviour will also be strengthened. Landlords will be able to make a possession claim immediately, and the ground would cover "behaviours 'capable of causing' nuisance or annoyance." This means that a wider range of tenant behaviours can be considered in court. 

You can read more about the new grounds in our guide.

How will the new system be enforced?

The government's white paper warned landlords and agents that "any attempt to find loopholes will not be tolerated".

The government also said at the time that it would "consider the case" for new or strengthened penalties to support those currently in existence, including the power for councils to issue Civil Penalties Notices. 

How do letting agents and landlords feel about the abolition of section 21?

In 2022, 71% of landlords believed abolishing section 21 would have a negative impact on the lettings industry, according to Goodlord and Vouch's State of the Lettings Industry Report 2022. 

However, in the 2023 edition of the report, this dropped to 62%.

At the same time, the number of landlords feeling neutral about the change has risen from 12% to 29%. 

In contrast, in 2022, 27% of letting agents believed the abolition of section 21 would have a positive impact. In 2023, this number had dropped to just 11%. 

When will section 21 be abolished?

In October 2023, the Renters (Reform) Bill is due to go through its second reading in parliament, which allows MPs to debate the terms of the bill.

Just before the second reading, the government published a response to the bill. It indicated that while the plans for abolishing section 21 will still go ahead, the abolition will not take place until "significant progress has been made to improve the courts."

Improvements include:

• Digitising the courts process
• Exploring how to prioritise cases of anti-social behaviour
• Improving bailiff recruitment
• Strengthen mediation services - likely by using the new proposed ombudsman