Landmark Renters' Rights Bill - Implications for Private Residential Landlords - Section 21 Notices

Residential landlords will need to shape up for the forthcoming legislation set out in the Renters’ Rights Bill put forward by the government.  The banning of Section 21 of the Housing Act 1988 as a method for evictions will provide greater security for tenants.

Andrew Morley, Chartered Legal Executive and Partner at Chattertons has over forty years' experience dealing with disputes and advising landlords on the law. Here he explains how the government’s introduction of the Renters’ Rights Bill marks a significant shift for the private rented sector. Designed to protect tenants and rebalance the relationship between renters and landlords, the Bill introduces new regulations that will profoundly affect the way rental properties are managed.

For private residential landlords already grappling with recent tax changes and increased regulatory scrutiny, this new legislative framework could be a deciding factor in whether they stay or leave the sector.  The change is expected to be pivotal for those with one or two properties under ownership, or so-called ‘accidental landlords’ renting out their home while away for work or other reasons.

One of the most impactful changes is the proposed ban on ‘no-fault’ evictions as presently allowed under Section 21 of the Housing Act 1988.  Currently, landlords may evict tenants with two months' notice without providing a reason and the ban is intended to give tenants more security.

Said Andrew:  “Removal of this route to repossession has been under warning for some time and was expected to be implemented during the last government.  In the event, they held back having decided the courts would be under too much pressure if the move was done too soon, too fast.

“This reform could particularly affect landlords who would otherwise rely on Section 21 notices to regain possession of properties for personal or financial reasons.  Once implemented, the proposed change will mean tenants benefit from a 12-month protected period at the beginning of a tenancy, during which time a landlord will not be able to evict them to move in or sell the property.

“After the 12-month protection ends, there will have to be four months’ notice for any landlord looking to use these grounds, instead of the current two months under Section 21.  This is to give tenants a more reasonable amount of time to find and move to a new home.”

Added Andrew:  “For private landlords, this change arrives at a challenging time. Over the past few years, they have faced a succession of regulatory reforms, including higher stamp duty for second and further property purchases, reductions in mortgage interest tax relief, and the imposition of higher energy efficiency standards. The introduction of this new Bill may prompt some landlords to reconsider their positions in the market.

“The problem here is the further reduction in the overall supply of rental properties, which is already falling short of demand.”

This Blog is written to raise awareness of these issues. While every effort has been made to ensure that it is correct at the time of first publication it may not be updated, even if the law changes. It is not intended to be specific legal advice and cannot be relied on as such. Chattertons are not responsible or liable for any action taken or not taken as a result of this Blog. If you think any of these matters affect you then we would be happy to advise.

Andrew Morley provides advice from our Lincoln office.

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