No fault evictions: next steps and foreseeable problems

by Christine Whitehead

It was good to see the announcement by James Brokenshire yesterday that the government has decided to put an end to Section 21 ‘no fault’ evictions and has accepted the majority view expressed to their consultation on longer term tenancies in the sector that tenancies should last indefinitely.

The original consultation suggested a three-year tenancy with a probationary period, so the shift in thinking towards giving tenants far greater security is very significant. (Click here to read our blog and response document to the consultation.) It is rare to see such a rapid change in approach as a result of consultation – and very much to be welcomed. It is also almost exactly the same thought process that the Scottish Government went through a couple of years ago before introducing indefinite tenancies in 2018. Indefinite tenancies are standard in many continental European countries, especially those with sizeable private rented sectors. England can now be regarded as among this group, with more than one in five households living in privately rented accommodation.

What’s next? Of course, it is only the first step – the government will consult further on the details, including further allowable reasons for eviction under Section 8, and details of how rents can be raised during the course of a tenancy. Landlords will almost certainly be able to get a property back for their own use, or if they want to sell it. The first is clearly necessary – how else would people working in another city or country for a year or so be able to let out their homes? The second, which is also included in the Scottish legislation (which has 18 allowable reasons for eviction!), is much more difficult to monitor effectively.

On rents the government’s statement was very much less clear, only noting that there seemed to be some support for (probably annual) inflation-related adjustments within the tenancy, and that it should be possible for landlords to charge more if they had invested in improvements to the property. This is in line with policy in many European countries where it generally appears to work well. Check out our report for the Residential Landlord Association (RLA) which explores lessons that can be learned from international experiences in the private rented sector in other countries.

What are the big problems? The two most obvious ones are that landlords will get more selective about the types of tenant they will accept, which could increase access problems, particularly for those on housing benefit. Some will simply be unprepared to risk a long-term involvement with poor tenants and will leave the sector or transfer into very short lets such as Airbnb. Today’s government response noted the concern about loss of supply and accepted that changes will only work if the legal framework for permitted evictions becomes far more effective than it is in current form.

As we have argued in the RLA report, greater security of tenure and clarity around the responsibilities of both landlords and tenants are necessary if we are to have a sector that works properly for both. The government’s announcement today is a recognition of this reality. If these changes make things work better for good landlords and good tenants – who make up the vast majority of the sector – then it will be far easier to address the relatively small part where behaviour of either landlord or tenant is poor. Let us hope that these changes can be implemented quickly.

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6 Comments on “No fault evictions: next steps and foreseeable problems

  1. “What are the big problems? The two most obvious ones are that landlords will get more selective about the types of tenant they will accept, which could increase access problems, particularly for those on housing benefit. Some will simply be unprepared to risk a long-term involvement with poor tenants and will leave the sector”

    You are quite right. I know two landlords who have issued Section 21 notices less than a week after the abolition consultation was announced.

    Without Section 21, tenants could have tenancies for life, which is what caused a shortage of rental accommodation in the last century, together with rent control.

    Sitting tenants reduced the sales value of properties considerably. By definition, the only people who would buy them were landlords, drastically reducing the pool of potential buyers. So when one finally became vacant it was sold, reducing the supply.

    It was Section 21 of the Housing Act 1988 that allowed an alternative to lifetime tenancies, and so gave landlords the confidence to increase the supply of rented accommodation, which had been shrinking for decades.

    Most landlords own only one or two properties. If they have no way of recovering them if their relationship with their tenants should break down they will not rent them out in the first place, and the supply will shrink once again. There will be less choice for tenants and rents will be higher. Less choice and higher rents are what Generation Rent is campaigning for by attacking S 21.

    Abolishing S 21 will not prevent homelessness. On the contrary, abolition of S 21 will increase homelessness as landlords flee the market.

  2. I am stunned at the stupidity behind the proposed ending of S21 and whilst everyone seems to have fallen into the lingo of ‘no fault’ when referring to it, there is in the vast majority of cases definitely a fault. I believe the misleading tag has infiltrated the conversations around housing due to Shelter’s war on the private rented sector. This so-called ‘charity’ is going to be responsible for even more homelessness. They’ve caused enough through their support of S24 and if Government had a clue they wouldn’t let anyone from the organisation have even the slightest influence.

    In the last few days I have heard of landlords with plans to serve notice (via S21) on dozens of tenants because they are no longer prepared to offer housing after this announcement. S21 is a safety net, or insurance policy. You hope you’ll never need it but it’s there for the times that things get tough and it’s the best way out. You take that away and the risks are just too great.

    I too am starting to serve notice on tenants, some of which have been with me for years. I have a decent portfolio but I’m going to gradually sell everything because there have been over 20 major changes to the industry in the last few years. Some of them I wouldn’t argue with but others are just going way too far. There are already tens of thousands of families living in temporary accommodation. When is someone in Government going to wake up to the fact that they’re going to make things a whole lot worse?

  3. Many years ago I was sent on an overseas posting for a fixed term of two years. I let my own house for a fixed term of two years with no continuation, a condition to which the tenant willingly agreed. In the present climate I would not dare to let my own house for fear of not being able to return. The message is that different situations require different tenancy agreements and the one size fits all approach by the present government leads to a loss of accommodation.
    Now I own fifty plus rental properties which I am quite happy to let on a permanent basis provided some realistic mechanism is provided to collect the rent, at present an optional payment, and some means of countering deliberate damage, a frequent occurrence.
    All the recent legislation, whilst aimed at improving rental properties, has led to increases in rent – my rents have increased by 20% in the last two years – and time consuming bureaucratic procedures which achieve next to nothing. Let us have some real front line landlords making the decisions rather than parliamentarians whose only objective seems to be to secure more votes no matter what the unintended consequences.

  4. I let houses out to students on a 6 month AST, serving a Sec.21 Notice after 6 months into the tenancy to ensure I can regain possession should the students decide to remain for whatever reason.

    New students sign up 6-9 months ahead of the start of the new academic year. Without the Sec.21 I have no certainty of vacation in readiness for my new tenants.

    The AST works reasonably well the clue is in the name ‘Shorthold’. Perhaps having a fixed term Tenancy Agreement and a long term Tenancy Agreement. A long term agreement some more incentives and safeguards to both Landlords and Tenants.

  5. Paragraph 153 of the government response to the consultation reads “Tenants preferred an initial tenancy length of three years or longer. 24% chose 3 years, 17% chose 5 years and 22% preferred no limit set – preferences which were supported by tenants who responded to the Shelter survey, where 23% selected 3 years (819 tenants), 27% picked 5 years (967 tenants) and 35% favoured no limit set (1,244 tenants).”

    22% of tenants replying direct, and 35% of tenants replying via Shelter, preferred no limit set. How can you describe that as the majority view, when most tenants preferred not to have unlimited tenancies, although it would have cost them nothing to have ticked the “no limit set” box?

  6. Misses the point Completely !
    The majority of Good tenants have tenancies that last – as long as they want them !
    Its the bad Tenants that are asked to leave. Just because the legislative process of Section 21 doesn’t require a reason to be given, – only Fools ( or clever manipulative campaigners ) would translate this wrongly into ” No-Fault-Evictions “

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