No Fault Evictions

Abolishing ‘No Fault Evictions’ – Keep Calm And Carry On!

There’s been near hysteria in the private rental sector since the proposals in the Renters Reform Bill were published.  Especially around the plans to abolish Section 21 – also known as ‘no fault evictions’. But is it really as dramatic a change as some commentators would want you to believe?

What is the rental reform bill?

The government published their 12-point plan. Mostly, these are common sense proposal that will protect both tenants and landlords.  These are:

  • Halve the number of non-decent rented homes by 2030.
  • Create a ‘House Improvement Programme’.
  • Abolish Section 21 eviction notice (also known as ‘The No Fault Eviction’)
  • Introduce a periodic secure tenancy structure
  • Reform new grounds for possession under Section 8.
  • Only allow landlords to increase rent a maximum of 1x per annum.  This is what landlords and agents are doing currently anyway.
  • Create a new, single ombudsman that private landlords must join (the same as letting agents already do). 
  • Introduction of alternative dispute resolution to enable landlords and tenants to avoid court proceedings.
  • Create a property portal to make sure that tenants, landlords, agents, and local councils can find the information needed relating to that property.  Eg EPC, Gas safety checks etc.
  • Strengthen local councils’ enforcement powers to crackdown on criminal landlords.
  • No blanket bans on renting to families with children or those on benefits
  • Tenants will have the right to request a pet in a property.  The landlord will not be able to reasonably refuse – with the key word here being ‘reasonably’.
  • Working with industry experts to monitor passport deposits.

No fault evictions what does this mean in reality?

Of all the above proposals, the point that’s received the most press, is the plan to abolish Section 21 eviction notices, also know as the ‘no fault evictions’. So, this is what I’m going to focus on for this article. My main reason for focusing on this first, is that there’s more noise and a lot of myths around it.

Section 21 has been dubbed by the pressure groups as ‘No Fault Evictions’. The implication being that landlords are on a whim and for no reason, evicting tenants. Its also been implied that once section 21 is scrapped, landlords will no longer be able to evict tenants.

Myth bust number one. Landlords evict their tenants for no reason! 

This just doesn’t make sense.  Why would they do this? It would be their income that’s affected. So this is one of those ‘red herrings’ that’s convenient for pressure groups to create their own rhetoric around.  I totally agree that there are rogue landlords, equally there are also rogue tenants. But 99% on both sides of the fence are genuine and honest.

Here are most of the reasons a landlord would want/need to evict their tenant:

  • Landlord needs/wants to sell their property to release the cash that’s tied up in it. They may have health issues, or need the money to help out a family member. We’ve had both of these scenarios this year.
  • They or a family member want to move into their property. Some landlords let out their family home because they have to work away in another part of the country or world for a few years.  Their circumstances then change and then need to move back to their home.  Or their children grow up and cannot get onto the property ladder. This means that the landlord either sells or lets the property to them.
  • Major Renovations. The property is old and dated and the only way the landlord can bring it up to a standard is to strip it back to basics and start again.  Or even sell it if the renovations costs prove to cost prohibitive.
  • Switch to holiday let. The press has painted a near utopian picture in recent years of how easy it is to make money in the furnished holiday let sector.  So when a landlord matches that rhetoric (regardless of how false this often is) with the reality of the private rental sector and the constantly shifting sands of legislation, its easy to see why some have become disillusioned with the private rental sector. (Watch this space regarding regulations of the second home and furnished holiday let sector. There’s a raft of changes coming down the line)

Finally, the rare but most stressful and costly reasons for a landlord needing to evict tenants:

  • Non-payment of rent 
  • Violence towards the landlord, other tenants, or the wider community
  • Illegal activity
  • Antisocial behaviour  

Why is Section 21 seen as a problem?

Its the easier of the two eviction notices to administer and no reason needs to be given to issue it.  This means that Section 21 is used as pretty much a blanket eviction notice for landlords to end tenancies, regardless of reason. The upshot of this is that there are a small number of rogue landlords who hide behind this type of eviction notice, to evict good tenants through no fault of their own and for no good reason.

Myth bust number two. All tenants are perfect

Most tenants are brilliant but as with rogue landlords, there are a small number of rogue tenants too. They are currently able to take advantage of the rather opaque eviction system.  The simplicity of Section 21 has made it the easier option for a landlord to remove a problem tenant, without in effect ‘poking the bear’.  This has resulted in violent tenants, tenants who indulge in antisocial behaviour towards their landlord or neighbours, tenants who carry out illegal activities, or those with large rent arrears, rarely being held to account for their actions. Thus these types of tenants continue to wreak their havoc on future, unsuspecting landlords and neighbourhoods and the pattern is never broken. 

Myth bust number three. The abolition of ‘No Fault Evictions’ means that landlords will no longer be able to evict tenants

This is also untrue.  There is and will continue to be the section 8 eviction notice.  This has the potential of being a better, more transparent eviction system. However, it has its issues, hence why its currently used far less than section 21.

Section 8 eviction notices. What needs to happen?

  • The format needs to be simplified.
  • More eviction grounds need to be included.  There are currently 17 grounds for eviction under section 8. There are plans in the white paper to add a further 9.  This includes allowing a landlord to sell the property (although proof of engaging an agent for the sale will be required).
  • The court system also needs to be simplified and timescales reduced. This will allow landlords to evict the rogue tenants more easily. 

Its clearly not a perfect process yet but there does appear to be moves towards clarity and simplification.

Its also worth noting that we’re still at the white paper stage, so there’s a long way to go. Goodness knows how many different housing ministers, or even Prime Ministers we’ll have by the time any proposals in the Rental Reform Bill become law!

Statistics and damn statistics!

For those of you who like stats, here’s some regarding the private rental sector that you might find interesting:

  • 2020/21 – the rental sector accounted for 4.4 million UK households
  • 19% of these are private rental properties and 17% are social housing.  This means that nearly one in five households in England live in the private rental sector.
  • There are 2.5 million landlords in the UK
  • 85% of landlords own between 1-3 properties
  • An average UK landlord earns between £7k and £15k per property per annum before tax, mortgage and running costs.
  • 73% of private renters are employed
  • One in five (20%) private rented households are in receipt of housing benefit
  • 3% of private renters are reported to currently be in arrears and 5% of those have been in arrears in the past 12 months.  However, private renters were far less likely than social renters to have had any arrears in the past year (8% private renters and 23% social renters).
  • 76% of renters ended their tenancy out of choice, with 8% reporting that they were asked to leave by their landlord or agent.
  • 83% of private renters report that they’re satisfied with their current accommodation.  For social renters this is 78%.
  • In 2022 there are estimated to be around 80,000 of court order evictions.  70% of these are from social housing.  This means that less than 1% of all the UK private rental tenancies will result in a court order eviction.

Source – The English Housing Survey

Keep calm and carry on

The bottom line is that if you’re a responsible landlord who’s happy to keep on top of the current and incoming legislation, then there should be nothing to fear from this proposed change if/when it comes into force.

There’s no doubt that there will be more hoops to jump through and more costs. But if you know this in advance you can factor this into your margins and adjust future rents accordingly.  It also means you’ll want to be extra vigilant with your credit checks and referencing, to be sure you don’t accidentally take on a problem tenant.  Remember, that whilst we all read the scary headlines about rogue landlords and tenants, these on both sides, account for a tiny minority.  The revised section 8 should ensure that this tiny group will soon have nowhere to hide.

Contact us:

If you’re at all worried about dealing with the new raft of legislation changes yourself, then contact John or Deborah at CAM Lettings in Hayle, or another local agent to manage your property for you.  We all live and breathe the legalities of the private rental market, so you don’t have to.  Whilst we might occasionally bang our heads on the desk in despair, its normally around how information is clumsily reported, rather than the facts. 

Some additional support to help you sleep at night

Another area you might want to think about is rent guarantee insurance.  With all the proposed changes coming down the line, it may be wise to have this additional level of protection. We use Boswells but there are other good, specialist companies out there.  Do your homework though, this isn’t an area where going for the cheapest option is necessarily the best.

If you have a problem tenant that you need to evict, there are also specialist agents out there who can help.  So if you’re at all worried about where to start, a quick phone call to a reputable eviction specialist company such as Landlord Action might help put your mind at rest.

Coming up….

I’ll be looking at some of the other proposed changes to the Renters Reform Bill in future articles, so please feel free to subscribe to be notified when they’re published.  Rest assured that by subscribing, you won’t be bombarded with emails and articles.  We’re a small and busy agency, so these articles have to be crowbarred into my day and tend to only get written when there are biscuits on hand to keep me going!

Finally, my blogs are my opinions, based on what I hear and see in the private rental market and sometimes the housing market in general. They are not, nor should they been read as legal advice.

Leave a Reply

Your email address will not be published. Required fields are marked *