This week the Government published radical reforms to the residential letting sector in its response to the 2018 consultation ‘Overcoming the Barriers to Longer Tenancies in the Private Rental Sector’.

The proposals

Dubbed as the “biggest change to the private rental sector for a generation”, the Government has announced an end to “unfair evictions” by proposing :-

• A new deal for renters to end unfair evictions – preventing private landlords from evicting tenants at short notice and without good reason;

• Step-change to create open-ended tenancies for all private renters – bringing greater peace of mind to millions of tenants in the private rented sector; and

• Landlords to have more effective means of getting their property back when they genuinely need to do so.

Part of the “new deal” and “step-change” will include, it is proposed, an end to no-fault evictions for Assured Shorthold Tenancies (ASTs) using Section 21 of the Housing Act 1988.

Landlords will therefore be unable to take possession action of their properties let on ASTs without reason, effectively creating ASTs for indefinite duration.

The Government is yet to flesh out the proposals but it is thought that Section 8 of the Housing Act 1988, which sets out the fault-based grounds for possession, will be amended to enable landlords to end ASTs when they have a legitimate reason for doing so. This may include, for example, where a landlord wishes to sell or move into the property. This will be in addition to the existing grounds for possession, including rent arrears, breach of tenancy and nuisance for example.

The Communities Secretary, Rt Hon James Brokenshire MP said in the press release this week :-

“By abolishing these kinds of evictions, every single person living in the private rented sector will be empowered to make the right housing choice for themselves – not have it made for them. And this will be balanced by ensuring responsible landlords can get their property back where they have proper reason to do so.”

The press release also explains the Government’s rationale for the proposed reforms. It is said that, with more than 4 million people now living in privately rented accommodation, the housing market has not kept pace with the changes in society. The proposed measures are said to provide greater certainty for tenants and make the housing market fit for the 21st century, whilst creating a more secure rental market for landlords in which to remain and invest.

In doing so, the Government proposes that the Court processes will also be expedited so landlords are able to “swiftly and smoothly” regain their properties where grounds for possession are made out, meaning landlords have the security of knowing disputes will be resolved quickly. It is also looking at ways to free up enforcement agent (bailiff) resources to help them prioritise possession cases, so possession can be recovered more quickly.

Our thoughts

Whilst the Government’s commitment to speeding up and simplifying the Court process is to be applauded, the proposed reforms to end no-fault evictions will clearly concern landlords and their agents. The requirement to prove a legitimate reason for possession will undoubtedly increase costs for landlords, particularly if a Court hearing is required as is currently the case with claims for possession under Section 8.

With nation-wide Court closures in the past few years, many County Courts are already overworked and resources stretched, and it is not uncommon for it to take over four months for a possession hearing to be listed in the busier London Courts. It is hard to see how this could be resolved and for claims to be dealt with quicker, especially if the ‘accelerated possession procedure’ dealt with on the papers without a hearing, reserved only for possession claims using Section 21 of the Housing Act 1988, is also abolished. Such discussions will no doubt tie in with the ongoing proposals for a specialist ‘Housing Court’, with jurisdiction to deal with all residential landlord and tenant matters separate to the County Court.

This is aside from any moral, ethical or financial views on a landlord’s right to recover possession of their property without any reason or fault on the part of the tenant, which has been a firmly established principle for the last 30 years. Either way, there is clearly concern for how these proposals, if taken forward, will affect the buy-to-let market generally; one of the most attractive elements of an AST for a landlord being that possession can be taken for no reason at the end of the term (if not before, if the tenancy allows for it).

Further consultation will now follow on the new proposals and responses are hotly anticipated.

To access the press release and the Government’s full response to the 2018 consultation, visit :-

https://www.gov.uk/government/news/government-announces-end-to-unfair-evictions.

Should you have any queries in relation to this Legal Update, please contact Faye Didcote on 01435 897297 or Faye.Didcote@kdllaw.com.

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