Last week, the Prime Minister Liz Truss reaffirmed the Government's commitment to the policies outlined in the Fairer Rented Sector Whitepaper, and abolishing Section 21 is still on the cards.
With rumours that a U-turn on Section 21 was to be announced, it came as a disappointment to landlords up & down the country who feel new policies will be damaging to the private rented sector.
In this article, we're going to give you an overview of what Section 21 is, and how evicting tenants could look once it is removed.
What is Section 21?
Section 21 allows landlords to evict tenants with 2 months' notice after their fixed term has come to an end. These are often called 'no-fault' evictions as landlords do not need to give a reason for ending the tenancy. Instead, Section 8 is used when a tenant has broken the terms associated with their contract.
Why is Section 21 being scrapped?
As part of the Government's plan to make the PRS a fairer place for tenants and landlords, scrapping Section 21 is said to allow tenants more protection & security when they have a place to live, rather than leave them stranded or having to find a new place very quickly because their landlord wanted them out.
Many charitable organisations as well as tenants find this to be unfair if they have been a good tenant, not broken the terms in their contract, and haven't been in serious arrears.
What does no Section 21 mean for landlords?
The key difference here will be that you will always need a valid reason for evicting tenants. For example, a Section 8 notice can still be served if tenants are in breach of their contract, and you can still evict tenants if you are selling your buy-to-let property.
Tenants, however, will be able to end their tenancy at any time as long as they give at least 2 months' notice. Although the rental market is very competitive right now and tenants are opting to stay in their current accommodation rather than risk missing out elsewhere, this could be frustrating for landlords if they thought they had a long-term tenant in their property.
What will happen after Section 21?
Whilst many landlords feel hard done by with the commitment to abolish Section21, there is some good news.
The Government also outlined in its Whitepaper it will be making changes to possession procedures so that landlords they deem as 'responsible' will be able to get possession of their property from anti-social tenants quicker.
Also, once tenancies have come to an end, they will move to a periodic system, whereby there will be no set end date on a tenancy, and tenants will be able to give 2 months' notice at any time.
Landlords looking to sell or move into their property may not be able to evict tenants within the first 6 months of a tenancy starting.
What do you think of the new changes, and how will Section 21 affect your portfolio?
If you need assistance understanding or getting prepared for new regulations to come into place, click below and let us know when to call you so we can help.