The private renting sector has been a hot topic of debate in recent years with many calling for reform to provide greater security for tenants. The new Government has listened, and impending legislative changes are set to drastically change the landscape.
The Bill is set to have wide-ranging implications for both tenants and landlords and has been designed with the intention of levelling the playing field between the parties, but with such large-scale change, will the playing field be levelled, or will we see a power shift altogether?
What are the key changes we can expect?
Abolishment of Section 21 Notice evictions
One of the most controversial changes under the Bill is the removal of the landlord’s ability to perform Section 21 Notice evictions, commonly known as “no-fault” evictions to take back possession of their properties.
The change is intended to provide greater security for tenants by removing the arbitrary threat of being uprooted and in some cases, potentially made homeless at the whim of their landlord. However, with such a change, we will see a significant curb in the powers of landlords and their ability to regain possession of their own properties.
The expansion and change of Section 8 grounds for possession
In line with the abolition of Section 21 Notices and with a need to enable landlords to have grounds to repossess their properties, the Government is expanding the grounds by which landlords can take their properties back.
Landlords will be required to prove that an eviction meets a ground under the Bill and if they are unable to do so, they will not be able to reclaim their property. The grounds are split into those which are ‘mandatory’, those where possession must be granted by the court if the ground is proven, and those which are ‘discretionary’ grounds, whereby the court can make their own assessment of the reasonableness of the eviction, even where the ground is proven.
A common ground for a landlord employing Section 8 proceedings, is whereby the tenant falls into rent arrears. Under the Bill, the government is providing further protection to tenants with an increase in the notice period landlords must give to tenants of termination of the tenancy, from two weeks' notice under the current legislation, to four weeks, and now tenants must have accrued arrears of at least thirteen weeks, compared to the current requirement of eight weeks of arrears.
This will see an increase in the timeframe landlords can expect to withstand rent arrears before being able to reclaim their properties and as a parallel, this will provide tenants a longer period to pay any rent arrears and thus remain in the property as it should not be forgotten that if the tenant is able to settle the arrears, the ground will not be met and thus possession will not be granted by a court.
Further restrictions are to be placed on landlords concerning the use of grounds whereby a landlord intends to move in or sell their property. Not only are tenants to be provided with a blanket protection from eviction on these grounds in the first twelve months of any tenancy, the Bill will require landlords to provide four months’ notice to tenants of their intention to rely on this ground. This has great implications for landlords as they will be completely unable to evict a tenant with the use of these grounds in the first year of any tenancy, regardless of the fact of whether they need to urgently move in to or sell the property.
Abolition of Fixed-Term Tenancies
Another fundamental change to the private renting sector, is the abolishment of fixed-term assured tenancies (“ASTs”), which have been a key long-term component of the sector for landlords, providing security for fixed periods of time; now all ASTs will be replaced by periodic tenancies.
All periodic tenancies will continue on an indefinite basis, whereby tenants will have the ability to terminate the tenancy by providing two months’ notice to the landlord, whereas in contrast, as discussed above, landlords will only have the ability to end the tenancy on certain grounds.
Greater regulation of rent increases
With the shift to periodic tenancies, the only way by which a landlord will be able to raise the rent for their property will be by serving a Section 13 Notice providing two months' notice to the tenant. This process can be utilised once per year and the increase can be to the ‘market rate’ going, of which ,if a tenant feels their rent is being increased beyond this, a decision can be made at the First-tier Tribunal.
Arguably the most debated change with regards to rent regulation, is the restriction which will prevent landlords from accepting offers above the advertised rent price. Some argue that this is positive in that it will in essence ban bidding wars, however for landlords, this change will see the removal of their choice to accept a more prosperous rent and tenancy. Greater regulation in this area will see the further erosion of landlord's ability to control the parameters of the tenancy agreements for their own properties.
There are several other changes of note being implemented with the Bill including:
- the introduction of a Landlord Ombudsman,
- the creation of a private rented sector database,
- a change on the restrictions as to pet bans in tenancies
With such a significant change to the legislation governing the private renting sector around the corner, the details of the bill should be scrutinised by vigilant landlords and tenants alike.
Landlords can anticipate greater responsibilities and restriction, whilst tenants can expect improved stability and security in their lives.
Whatever happens, we here at Curwens can offer our clients up to date legal advice, from our talented litigation team. Pls feel free to email This email address is being protected from spambots. You need JavaScript enabled to view it. or call us on 020 8363 4444
