A Fairer Rented Sector
The Conservative party’s manifesto pledge from 2019 to abolish section 21 has recently started moving forward, with a white paper being published on the topic. As might be expected, this is welcome news for tenants and an unpleasant development for landlords.
Section 21 effectively functions as a mandatory ground for possession and does not require any element of fault on the part of the tenant. Provided the landlord has served a technically valid notice, there is usually little prospect of defending a possession claim on this ground.
The recent white paper setting out the government’s plans to reform the private rented sector via the Renters’ Reform Bill, building on 2019’s Government response to ‘A New Deal for Renting’ has been poorly received by a large section of the private landlord market and the National Residential Landlord Association. Some private landlords are already leaving the sector over concerns about how this policy will impact them and their ability to regain possession of their properties.
Of course, since the white paper, Boris Johnson has resigned, sacking Michael Gove, the Minister for Levelling Up, Housing and Communities, shortly beforehand. How his successor, Greg Clark takes this forward remains to be seen. It is understandable that the proposals have caused concern but two points are worth highlighting at this stage.
Firstly, the proposals are only at white paper stage and have a long way to go before coming into force as legislation. There will undoubtedly be changes during the process and it is too early to say what exactly will change. The Deregulation Act 2015 is a good example of an Act being particularly watered down by the time it came into force.
Secondly, even though the government has been vocal about its desire to end no fault evictions for some time, it is worth considering whether abolishing section 21 is actually the same thing under the current proposals. Arguably it is not. The indications we have are that there will still be what could be described as no fault evictions, such as a landlord wanting to sell their property or move into the property themselves, or have a relative move into the property. It is interesting to note that, even though section 21 does not require a reason, these are some of the most common explanations tenants receive from landlords.
The white paper states clearly that there will be no loopholes, tougher sanctions and on paper much of the developments look positive for tenants. As mentioned above though, the devil will be in the detail and landlords may not want to rush any decisions just yet.
The government’s white paper comes at a time of soaring costs of living, tenants bidding to rent properties, government talk of extending the right to buy and an ever-worsening housing crisis. Michael Gove expressed a desire to shrink the private rented sector but with 4.4 million households in private rented accommodation, shortages of social housing and housebuilding being far behind demand it is somewhat unclear where people are expected to live unless they are able to purchase their own home, an increasingly distant prospect for many, especially generation rent.
At the latest count some 600,000 properties remain empty in the UK, so it would seem beneficial for the government to take steps to turn these properties back into homes, rather than leaving them to sit as investments, if there is an interest in solving the housing crisis.
The government will need to proceed carefully in handling the current economic situation and avoiding alienating landlords, many of whom are already moving into the short term or holiday let market.