Landmark reform for private renters: implications for landlords and tenants

Background

On 15 April 2019, the then-government announced: “Private landlords will no longer be able to evict tenants from their homes at short notice and without good reason”.

Concerns such as lack of affordable housing, unfair practices in the rental market and issues surrounding the sale of leasehold houses and onerous grounds rents have culminated in the renters reform bill proposed in 2021.

The release has been delayed as a result of the significant impact of the coronavirus pandemic on the housing sector.

Termination of tenancy under S21 Housing Act 1988

Section 21 Housing Act 1988 applies to assured shorthold tenancies; this section allows landlords to evict their tenants without having to give any reason.

A section 21 notice has to give the tenant no less than two months’ notice, but once the notice has expired, if the tenant has not vacated the property the landlords can apply for a possession order.

Reforms

The Queen’s Speech announced the renters reform bill. The main reforms due to be introduced are:

• The renters reform bill which will abolish so-called ‘no fault’ section 21 evictions
• The government promised to strengthen landlords’ rights of possession
• A legally binding Decent Homes Standard is proposed for the private rented sector for the first time.

Implications for landlords

• You will not be able to evict a tenant without having to give a reason. One particular area of concern for estates and farmers will be where an assured shorthold tenancy (AST) is used to house an agricultural employee. The detail of the bill will need to be seen to understand if notice can still be given when the employment comes to an end
• You will still be able to evict tenants under Section 8 which has strengthened the grounds for possession such as repeated incidences of rent arrears
• You will be unable to grant new ASTs
• The processing of repossession orders will improve.

Implications for tenants

• Landlords will have to provide you with a reason to evict you
• Improved security and protection from eviction
• Safer, better quality and better value homes for tenants
• Ground rent is effectively abolished, and in some cases, nominal