Tenancy reform and ending section 21: making this promise a reality

After the Government announced they will scrap section 21 'no fault' evictions and introduce open-ended tenancies, the End Unfair Evictions campaign coalition took a moment to celebrate. But the reality is that there is still much work to do. This sea change in tenancy law and renter rights will not happen straight away. First there will be a consultation (out 'shortly') on what the new open-ended tenancy model will look like, including legitimate possession grounds. Generation Rent will be talking to tenants, landlords and government to get the detail of the new tenancy right.

Once the consultation period closes, the government will have to confirm the design of the new tenancy and prepare a Bill to enact this in legislation. The earliest this legislation could be introduced into Parliament is likely Autumn. Although tenancy reform now has cross-party support, there’s the potential for this Bill to take some time to pass, especially given how much Parliamentary time Brexit needs. If the legislation is passed in 2020, it won’t be implemented immediately.

So, realistically, the new tenancy regime and extra protections for tenants are a few years off. In the meantime, we’ve got to keep the pressure on to be sure this happens, particularly if there’s a change of Conservative leadership. We also have to keep campaigning for other practical change for renters, such as beefing up council enforcement to ensure that tenants are protected from revenge eviction while section 21 remains.

There’s been the usual scaremongering from some that requiring landlords to provide a good reason for removing a tenant from their home will destroy the rental market, cause all landlords to sell up, harm tenants, drive up homelessness, end civilisation, and so on.

The old ‘disappearing homes hypothesis’ has been frantically touted, with some claiming that removing section 21 will cause practically all landlords to sell up, so tenants will be made homeless and be unable to find homes to rent. But of course, as we explain here, if a landlord sells then that home doesn’t vanish off the face of the earth. It’s either bought by another landlord, or by a first-time buyer (directly or via a chain). If landlords sell as a result of the changes, this is good news for first-time buyers and could boost homeownership.

That said, there is a risk some landlords will move their rental properties into the full term short-term let market, e.g. AirBnB. Of course, most won’t do this because plenty of good landlords out there do want to provide long-term homes for tenants who will care for the property as their home. But we’re already seeing a trend towards homes becoming short-term lets in cities - and rural beauty spots. That’s why our next campaign will focus on regulating short-term lets to address this proactively.

It’s also possible that some landlords will be pickier about the tenants they choose, which could make it harder for tenants on benefits to find private rented homes. Again, income discrimination has been happening for many years and needs to be addressed regardless. We need to build more social homes, urgently. The welfare system must be fixed to ensure that benefits meet the actual cost of housing and are paid by government on time, to protect tenants and landlords from arrears. And a government-backed rental guarantee in the event of arrears could support the access of people on benefits to private rented home.

The Government has said that, while they will scrap section 21, they’ll introduce a new ground under section 8 (which currently covers rent arrears and other breaches of contract) for repossession for property sale, as well as improving the court process for removing tenants at fault. These issues came up during the campaign to end section 21, so we've given a lot of thought to how landlords' needs can be accommodated while safeguarding tenants. Tenancy reform of this kind needs to be got right to avoid unintended negative consequences and protect tenants and landlords who are trying to do everything right.

There’s still all the detail to be worked out, and responses to the government’s consultation last summer on the barriers to longer tenancies gave some fascinating data on experiences of and possibilities for private rental market from landlords, tenants and others. We’ll explore some of this detail and data, from notice periods to rent rise caps to safeguards for tenants regarding the new possession ground for sale, in a later blog.

Now with cross-party support for open-ended tenancies and an end to section 21, there’s strong and growing consensus that major reform is needed to make private renting in England (and Wales) fit for those who live in it today. Respected authorities on the private rental market, such as LSE housing academic Christine Whitehead, have welcomed the open-ended tenancy as a necessary step forward to improve private renting for tenants and landlords. We’ve also been delighted to have some landlords contact us to say they’re supportive of removing no fault eviction. We know there are plenty of good landlords out there who provide long-term homes for tenants and would never evict their tenants without giving them a good reason. But a secure home should not be a matter of luck for renters. It’s great news that the government now agrees and will legislate on this.

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  • David Abbs
    commented 2019-04-22 13:56:02 +0100
    Without Section 21, tenants could have tenancies for life, which is what caused a shortage of rental accommodation in the last century, together with rent control.

    Sitting tenants reduced the sales value of properties considerably. By definition, the only people who would buy them were landlords, drastically reducing the pool of potential buyers. So when one finally became vacant it was sold, reducing the supply.

    It was Section 21 of the Housing Act 1988 that allowed an alternative to lifetime tenancies, and so gave landlords the confidence to increase the supply of rented accommodation, which had been shrinking for decades.

    Most landlords own only one or two properties. If they have no way of recovering them if their relationship with their tenants should break down they will not rent them out in the first place, and the supply will shrink once again.

    There will be less choice for tenants and rents will be higher. Less choice and higher rents are what Generation Rent is campaigning for by attacking S 21.

    Abolishing S 21 will not prevent homelessness. On the contrary, abolition of S 21 will increase homelessness as landlords flee the market.
  • David Abbs
    commented 2019-04-21 21:58:25 +0100
    “if a landlord sells then that home doesn’t vanish off the face of the earth. It’s either bought by another landlord, or by a first-time buyer (directly or via a chain).”

    But the number of tenants evicted when a landlord sells will exceed the number of renters who become owner-occupiers, so rents – and homelessness – will rise. This is explained here: https://www.property118.com/generation-rent-tries-hoodwink-policymakers/#comment-106967