Delivering the Queen’s speech in May 2022 on behalf of the government, the then Prince Charles announced a series of measures designed to improve the lives of tenants in the private rental sector.
Amongst provisions to update the regulation of social housing and raise the quality and safety of rented homes, one commitment stood out: the abolition of Section 21.
The repeal of Section 21 is meant to strike a balance of security between landlords and tenants but will it be a positive step towards reform for the PRS?
Described as a mechanism for ‘no fault’ evictions, Section 21 was introduced in the Housing Act 1988 by the government of Mrs Thatcher.
It was immediately controversial because it gave landlords the right to evict tenants in Assured Shorthold Tenancies (representing the majority of private rental agreements) by giving two months’ notice without any requirement to give a reason.
The argument in its favour was that the landlords owned the properties and should not be limited as to how they chose to use them. Representatives of tenants were alarmed by its introduction and have opposed it unwaveringly ever since.
The first serious sign that Section 21’s days were numbered came under Prime Minister Theresa May in 2019 when her Housing Minister recognised the vulnerable position in which it placed millions of private renters.
No progress was made, and if anything, the practice of ‘no fault’ evictions increased, despite its temporary suspension during the worst of the coronavirus pandemic.
May’s successor Boris Johnson turned the idea into a promise, but as he left office barely three months after the Queen’s speech, it was unclear whether his successor, Liz Truss, would actually fulfil that commitment.
However, it has been confirmed that the (current) government has no intention of going back on their pledge to ban landlords from using Section 21 notices and will be proceeding towards the repeal.
The debate for reform
Reform of the private rental market has been the subject of intense debate since the 1980s, with a particular focus on Section 21. Not only did the threat of eviction hang heavily over tenants, but the fear of landlords invoking it often prevented renters from raising with their landlords legitimate complaints about inadequate living conditions.
In 2017, the National Audit Office identified Section 21 evictions as ‘the biggest single driver of statutory homelessness in England’.
The question of the impact abolition might have on housing reform is complex and uncertain. Protections for private tenants, in response to ‘Rachmanism’ – the exploitation and intimidation of tenants by unscrupulous landlords – were introduced through the 1960s and 1970s.
The 1988 Act was a significant rolling back of the regulatory regime, putting, as some critics claimed, too much discretionary power back in the hands of landlords. Ever since then, successive governments have struggled to find a balance between the rights of the two parties.
If Section 21 is abolished, landlords will still have the right to evict tenants on sufficient grounds and the Renters’ Reform Bill represents a strengthening of the old Section 8 eviction process, positing new grounds such as repossession in order to sell the property or for landlords themselves to move back in.
Otherwise, tenants will be protected unless they are in breach of their rental agreement. A new Housing Court is also proposed to provide a quicker means of settling disputes.
Understandably, some landlords are concerned about the negative implications for their properties and their business. At its most extreme, it is feared that one unintended consequence could be a stunting of the growth of the private rental sector leading to a shortage of housing for the most vulnerable.
Is the fear warranted?
It really does depend on which side of the proverbial fence you sit on and who you look to for advice about the reform as everyone has their own viewpoint.
There are those that say reasonable and responsible landlords should have nothing to fear from this reform and that the strengthening and widening of Section 8 should result in a number of protections for landlords because, provided that tenants abide by the commitments they have made in their rental agreements, there should be no increase in the instances of damage by those tenants.
If, however, tenants neglect their obligations, they can still be evicted, using the Housing Court
Responsible renters will remain a reliable source of income and only those landlords who operate without regard for tenants rights (under the radar) or trying to force them out in order to raise rents to unscrupulous levels or install favoured tenants will be frustrated by the proposed reforms.
The intention is that the reforms accompanying the abolition of Section 21 will give a balance of security between landlords and tenants, resulting in a more peaceful, harmonious relationship.
Although cautiously optimistic about the proposal, the industry is, at the same time, realistic about the limitations of the move.
In itself, scrapping Section 21 does nothing to address the problem of rising rental costs.
People who rely on the private rental sector are already being asked to pay rents far in excess of what they would need to fund mortgages on the homes they live in.
With the cost of living rising and the number of new homes being built consistently failing to reach government targets, finding affordable properties has become a major challenge.
According to some sources including The Guardian, demand for rentals outstrips supply by three to one or if you view event more recent stats up to 11 tenants are reported as vying for the same property.
So it’s not uncommon to see landlords and their agents holding ‘open house’ viewings with prospective tenants queuing around the block and even submitting sealed bids in an attempt to secure the rental property.
While the abolition of Section 21 may restore much-needed balance in the rights of tenants and landlords, it is only one measure and does not represent the comprehensive reform that the sector needs.
For many it is a step in the right direction, for others it represents a step backward, putting further pressure on a buckling and fragile rental industry but it is only one step in a much, much longer journey that may deliver less than what is needed.
“Whatever the Government’s plans, a wide range of reforms are desperately needed to support the sector. The supply crisis in the sector must be addressed urgently, while much more needs to be done to root out criminal and rogue landlords”.
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Image: Twitter courtesy of Conor Finn