The imminent abolition of Section 21 has been described as the “biggest change to the private rental sector in a generation” but also “the biggest threat to landlords and letting agents in years”.
The government consultation period has ended and landlords, tenants and the wider industry are waiting for clarification on the proposed changes.
Here we explore what the end of Section 21 will mean for you as a landlord and how you can get prepared, organised and fully compliant for when the new legislation is in place.
Section 21: The Story So Far
Introduced as part of the Housing Act 1988, Section 21 evictions are typically the first step taken by a landlord to regain possession of their property.
Because landlords don’t have to give a reason for terminating a tenancy, they’re often called ‘no fault’ evictions. And because Section 21 has been used by unscrupulous landlords to evict tenants for the most trivial of reasons, its reputation and suitability has been challenged.
In response to criticism and campaigning by tenant organisations and charities, the government announced plans in April 2019 to abolish Section 21. The report ‘A New Deal For Renting’ outlines proposals that require landlords to provide “concrete, evidenced reason already specified in law” if they want to end a tenancy.
And to do this, Section 21 will no longer be an option. Instead, you’ll need to use Section 8 of the Housing Act 1988, a route that can currently be taken when a tenant has rent arrears, has been involved in antisocial or criminal behaviour, or has broken the terms of their tenancy agreement.
After a consultation period between July and October last year, the Ministry of Housing, Communities and Local Government is now analysing responses before presenting its final proposals.
The Abolition of Section 21: Industry Reaction
Since the plans were announced, trade bodies and landlords have warned of the potential negative effects of scrapping Section 21. Indeed, David Cox, chief executive of letting agents regulator ARLA Propertymark , warns of a “devastating” impact.
The regulator also shared its concerns as part of the Fair Possessions Coalition, a group made up of multiple landlords’ associations who collectively responded during the consultation period.
Their central statement reads: “A thriving private rental market that provides choice for tenants hinges on landlords having confidence that they can regain possession of their property in a timely and efficient way. At present, only Section 21 repossessions provide that certainty. It should be kept unless and until a new system is in place that provides landlords with the same level of certainty. The other routes currently available for repossessing properties do not meet this test.”
And this apprehension is backed up by research into landlord attitudes which reveals:
33% would leave the rental market if no clear and effective alternative to Section 21 is provided
70% would be less likely to offer long-term tenancies if Section 21 is removed
43% would become more selective when choosing tenants
What Will Replace Section 21?
Under the proposals, landlords will only have one option when they need to gain possession of their property: using Section 8 of the Housing Act 1988.
With the end of Section 21, a revised version of the existing Section 8 will become the only legally sanctioned method of evicting tenants.
The aim here, according to the government report, is to “to introduce a new, fairer deal for both landlords and tenants” which will “provide tenants with more stability” and landlords the support to “provide the safe, secure, and decent homes the nation needs”.
How Section 8 will change hasn’t yet been announced but the report promises to “improve its implementation”.
Unlike Section 21, the process requires landlords to give a reason for pursuing an eviction: one whose validity will need to satisfy a judge.
And it’s the efficacy of the courts which is troubling many.
Because a Section 8 eviction can be legally challenged much more easily than one under Section 21 and is currently more costly, there are fears that without a major overhaul, it will prove inadequate and prohibitively expensive. The Fair Possessions Coalition go as far as to say the current court system is “not fit for purpose”.
The government has promised to expedite the court process so landlords can “swiftly and smoothly regain their property” while reducing costs, avoiding delays and minimising disputes.
But whether that happens remains to be seen.
How Will the End of Section 21 Affect You?
So, as a landlord with houses and apartments to rent, how can you prepare for this impending change?
Whatever new legislation is in the pipeline, now is the time to make sure you’re as organised as possible.
Alongside keeping informed of the outcome of the consultation, there are other proactive steps you can take:
Get and stay compliant
As the legal requirements of the new legislation aren’t yet agreed, it makes sound business sense to get into good compliance habits now.
This means more than just writing down what you’re doing in a notebook. Innovative letting agents make it easy to digitally manage all aspects of compliance, ensuring the necessary documentation is logged, shared and stored safely.
Make Ur Move’s newly launched online service, The Good Landlord, incorporates functionality that gives landlords control over all aspects of property management. In a few clicks, you can quickly and easily access and share important documents, set reminders for safety certificates and manage rent collection, all while efficiently maintaining compliance.
So if you ever find themselves having to evict a tenant, you’ll instantly have all the crucial evidence available that you’ve acted according to the law. And you’ll be fully prepped to start marketing your apartment to rent to a new tenant.
Encourage long-term tenancies
Long-term tenancies make perfect business sense. You get regular, hopefully hassle-free income and your tenant feels settled in the property.
So make sure you know your target market inside out, tailoring your property to suit their exact needs and budget and giving them what they demand. Long-term tenancies should then become easier to secure.
Once you’re attracting the right kind of tenant, one who respects your property and pays the rent, you’re minimising the chances of having to use a Section 8 eviction notice.
Establish and maintain positive tenant relationships
A mutually beneficial landlord-tenant relationship relies on an open and clear dialogue. Work in partnership with your letting agent to keep the lines of communication friendly yet still professional.
And once you’ve got a reliable tenant, make it easy for them to want to stay: consider their requests to allow pets or paint a wall a different colour, respond to repair and maintenance requests efficiently, and respect their privacy.
A proactive letting agent can facilitate maintaining this relationship, making it more likely your tenant will want to keep renting and less likely you’ll have to turn to the law to seek possession.
Discover how easy it is to remain compliant with Make Ur Move, the innovative property experts
