Section 21 will be abolished for all new tenancies 6 months after the Renter’s reform bill becomes an act of parliament. It will be abolished for all existing tenancies a further 12 months down the line.
The estimated dates are as follows:
- Section 21 abolished for new tenancies: 1st Oct 2024
- Section 21 abolished for all pre-existing tenancies: 1st Oct 2025
What is a Section 21: A short summary
Section 21 is a provision under the Housing Act 1988 that allows landlords, particularly in Assured Shorthold Tenancies (ASTs), to evict tenants without needing to provide a reason for eviction. Landlords can give a two months’ notice using a Section 21 Notice (Form 6A) to terminate the tenancy agreement and regain possession of the property. This type of eviction is often referred to as a “no-fault” eviction because tenants can be removed even if they haven’t violated the tenancy terms. This provision is set to be abolished under the Renters Reform Bill.
Why will section 21 be abolished?
Section 21 is being abolished due to concerns about the insecurity it creates for renters. Michael Gove and the government acknowledge that section 21 “no fault” evictions result in a lack of tenant security and discourage tenants from challenging poor living conditions or unfair rent increases due to the risk of eviction without reason.
The Conservative Manifesto 2019 promised a ‘better deal’ for renters, including the abolishment of “no-fault” evictions. The government aims to empower tenants to challenge poor practices and unfair rent increases without fearing eviction. A Renters Reform Bill was proposed in the Queen’s Speech in 2019 and 2021, outlining the intention to abolish section 21 and introduce a ‘fairer’ tenancy structure.
Some landlords claim that the abolition of section 21 is part of a strategic government push to drive private landlords out of the market. They point to the fact that certain large investment firms such as Blackrock are buying up private family housing while the government is making it harder for small time landlords to stay in business. The abolition of section 21 is just the tip of the iceberg. In 2020, the government decided that landlords would no longer be able to deduct mortgage expenses from rental income, making it much less profitable for landlords.
How will section 21 abolition affect landlords
Research indicates that about 30% of landlords plan to reduce their property portfolios due to the change. With Section 21 gone, the new laws will make it easy to evict if landlords are selling. Therefore, it may be the case that more rental properties will be sold, increasing supply of homes for sale, which could affect market prices.
The combination of landlords selling properties and increased caution in tenant selection could exacerbate the shortage of private rental properties.
Section 21 was often used for evicting renters in an affordable way, with a guaranteed outcome. With this easy, guaranteed eviction process soon to be gone, landlords might be less lenient now, leading to an increase in evictions before the change takes effect.
The abolition of section 21 (no fault eviction) won’t be great for all tenants either. Often tenants who fall into rent arrears prefer landlords to evict them with a section 21, rather than a section 8, because they fear that local councils will be less likely to rehouse them if they are at fault.
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What other new laws will be introduced by the renters’ reform bill?
Right to Request a Pet
Tenants now have the legal right to request a pet in their rental home, and landlords cannot unreasonably deny this request. Landlords must respond in writing within 42 days. Landlords can require tenants to have pet insurance covering property damage.
Bans on Renting to Families and Benefit Recipients
It becomes illegal for landlords to impose blanket bans on renting to families with children or those receiving benefits.
Recovery of Possession
The Bill supports landlords by simplifying the process of recovering properties from anti-social tenants, tenants in arrears, and for family member relocations. Landlords may reduce the notice period for irresponsible tenants.
The Ombudsman scheme, previously mandatory for letting agents, will be mandatory for all private landlords. The Ombudsman can enforce remedies, including compensation up to £25,000 and rent reimbursement for subpar service.
Decent Homes Standards
Future legislation will ensure that rented properties comply with the Decent Homes Standard, although it’s not included in the initial draft of the Bill.
Unfair rent review clauses will be ended, and landlords will only be allowed to raise rent annually. Tenants can claim back rent for substandard properties.
Grounds for Possession
The existing Section 21 framework will be replaced by the revised Section 8 framework. New mandatory grounds include repeated serious arrears, landlord or close family member moving in, and sale of the property. The discretionary ground for anti-social behaviour will be revised, allowing easier eviction in certain cases.
Transition to Periodic Tenancies
All tenancies will transition to periodic, ending only if the tenant chooses to leave or if a valid reason defined by law is present, eliminating the need for “no-fault” evictions under Section 21.