How the proposed scrapping of Section 21 will impact landlords

For years, tenant groups and the Government have been urging the abolition of Section 21 "no fault" evictions.

Currently, landlords can evict tenants after the first six months of a tenancy and at the end of any fixed term, by providing them with two months' notice, without giving any reason.

This is considered unfair to tenants who may have lived in the property for years and are given little time to find a new home. The situation can be upsetting and inconvenient for tenants, who have no choice about moving.

However, in reality, most landlords do not evict tenants for no good reason.

If tenants are complying with the terms of their tenancy agreement and paying their rent on time, landlords usually have no reason to let them go. Good tenants are typically only evicted if landlords want to sell or use the property themselves, which are already covered under Section 8.

Section 21 notices are often used as a simple way to terminate a tenancy when both the landlord and tenant agree or when there is another valid reason for eviction.

So what are the current proposals? 

In June 2022, the Government proposed plans in its White Paper, "A Fairer Private Rented Sector," regarding the end of Section 21 evictions. These proposals were recently summarized in a House of Commons research briefing published in March 2023.

“…to abolish Section 21 evictions and introduce a simpler, more secure tenancy structure. A tenancy will only end if the tenant ends it or if the landlord has a valid ground for possession.

The grounds for possession will be reformed to ensure landlords have effective means to gain possession of their properties when necessary. New grounds will be created to allow landlords to sell or move close family members into the property. Grounds covering persistent rent arrears and anti-social behaviour will be strengthened.”

Naturally, landlords have expressed concern and argued that they should always retain the right to repossess their property when they want or need to.

Various landlord organisations, including the NRLA, have been lobbying to ensure that before Section 21 is amended or abolished, both the Section 8 grounds for possession and the court system are improved.

On the other hand, those advocating for tenants' rights are determined to prevent landlords from exploiting the strengthened Section 8 grounds and to ensure that the required notice period is lengthened when tenants are not at fault.

Landlord concerns over evictions for rent arrears

Although rent arrears are a valid reason for eviction, landlords must wait until a tenant is two full months behind on rent before issuing a Section 8 notice. If the tenant fails to vacate the property by the specified date, the landlord must then seek a possession order, which could take some time to obtain, particularly if a court hearing is required. As a result, it could be several months before the landlord is granted a possession order.

During this period, the tenant is unlikely to be paying rent, which could leave landlords with a significant financial burden, particularly if they have a mortgage on the property that they must continue to pay.

In reality, many landlords resort to using Section 21 to evict tenants who fall behind on their rent. They can issue the notice immediately, and once the two-month notice period has elapsed, if the tenant refuses to vacate the property, the landlord can apply for an "accelerated possession order." This process usually does not require a court hearing and is therefore quicker than applying for a standard possession order.

If Section 21 is abolished, the concern is that it could become more time-consuming and expensive for landlords to evict tenants who fail to pay their rent, unless significant improvements are made to the court possession process.

If the proposed abolition of Section 21 is enacted, tenants will have the right to remain in a property until either they choose to leave, giving two months' notice at any time, or their landlord is able to evict them under specific grounds. This would mean the end of Assured Shorthold Tenancies that state the length of the initial period.

Under the new system, all private rented tenancy agreements will become periodic, with no fixed end date. For landlords, this means that existing tenancies currently within their initial or fixed term will simply convert to periodic tenancies.

In most cases, tenants will continue to be protected for the first six months of their tenancy, provided they haven't breached their agreement. So, even if landlords have a valid ground for eviction, such as wanting to move into the property themselves or selling it, they won't be able to do so within the first six months.

When are these changes likely to come into force?

According to the current plan, if the Renters' Reform Bill is passed in spring 2024, new tenancies will transition to the new rules around autumn 2024, while existing tenancies will move to the new system before the end of 2025.

On 15 February 2023, Baroness Scott of Bybrook said: “Ensuring a fair deal for renters remains a priority for this Government, and we will legislate in this Parliament to abolish Section 21 ‘no fault’ evictions’.”

As it stands in March 2023, the Renters’ Reform Bill is still being drafted by Civil Servants in the Department for Levelling Up, Housing and Communities and it has not yet begun to make its way through Parliament. However, it is expected to be introduced before the current Parliamentary session ends in May and passed into law by spring 2024.

The Government has suggested that:

When section 21 is scrapped, there will be a two-stage transition:

All new tenancies will transition to periodic, governed by the new rules

All existing tenancies will move to the new system

Landlords will have at least six months’ notice of the effective dates and there will be at least 12 months between stage one and stage two.

So, if the Renters’ Reform Bill is passed in spring 2024, we can expect new tenancies to be subject to the new rules around autumn 2024, and existing tenancies before the end of 2025.