Section 21 Abolishment - How will affect you ?

The Renters’ Rights Bill is the most significant reform the private rented sector (PRS) has seen since the Housing Act 1988. Introduced to Parliament on 11 September 2024, the Bill has wide-ranging implications for landlords, tenants, and letting agents alike. 

However, letting agents will arguably be impacted most by the changes.

CURRENT SYSTEM: HOW LANDLORDS REGAIN POSSESSION

Under the current system, Section 21 notices allow landlords to regain possession of their property once the fixed term ends. They simply have to give tenants a two month notice to evict and they don’t have to specify the reason, hence the term “no-fault eviction”.

However, evicting a tenant during a fixed term requires landlords to issue a Section 8 notice, where they need to cite specific grounds for repossession.

Section 21 notices have often been criticised by tenants’ rights campaigners because of the insecurity and instability they can cause.

However, they’re favoured by landlords and letting agents because of their convenience and the cumbersome nature of Section 8 notices.

The Renters’ Rights Bill proposes the abolition of Section 21 evictions, which have allowed landlords to terminate tenancies without providing specific reasons.

PROPOSED CHANGES UNDER RENTERS’ RIGHTS BILL

The Renters’ Rights Bill proposes the abolition of Section 21 evictions. Simultaneously, fixed-term ASTs are being replaced by periodic tenancies.

This means landlords will now have to serve a Section 8 notice to evict tenants.

By preventing what the Government calls “arbitrary” evictions, the aim is to improve the current system for both 11 million private renters and 2.3 million landlords.

The Bill is designed to give renters much greater security and stability so they can stay in their homes for longer and build lives in their communities.

IMPLICATIONS FOR LETTING AGENTS

The abolition of Section 21 evictions under the Renters’ Rights Bill brings significant challenges for letting agents.

Increased admin - Section 8 notices are more complex and require landlords to cite specific grounds for eviction and provide detailed explanations. As a result, agents will have to spend more time on paperwork to support their clients.

Risk of non-compliance - Incorrectly citing grounds in a Section 8 notice can lead to rejection by courts, which delays the eviction process. This makes staff training essential ahead of the Renters’ Rights Bill becoming law.

Landlords might leave the sector - increased legal costs for landlords and less flexibility may encourage them to sell up. Providing Rent Protection & Legal Expenses Insurance can help you prevent that. Please ask for further details.

The information contained in this document is intended as a guide only and does not constitute legal advice. For more information, please visit gov.uk.