What will this mean for private residential landlords?
Currently, where an assured shorthold tenancy is in place, a landlord can provide a tenant with two months’ notice to leave the property once their fixed term has come to an end. Landlords are not required to provide their tenants with a reason for the eviction, making it difficult and often impossible for a tenant to challenge a section 21 notice.
There has long been calls for new legislation to restore the balance between landlords and tenants and provide tenants with a fairer rental sector. It has been proposed that this should be done by providing tenants with greater rights and abolishing the section 21 eviction procedure.
It is now very likely that the section 21 procedure will be abolished as part of the Rental Reform Act – although when that will happen is still undecided. Landlords should expect change in the next 12 to 24 months. They should assume that these changes will apply to existing tenancies as well as for new ones.
What should landlords expect from the reforms?
- Section 21 evictions e.g., no fault evictions will be abolished.
- There will be an increase in reliance on section 8 notices where eviction is permitted because of rent arrears as well as other specific grounds.
- Landlords may only be able to raise rents annually and any increase may be capped.
- Tenants will have greater rights to challenge notices, possibly at the tribunal or by using an ombudsman.
- Tenants may have greater recourse if a landlord has not complied with their repairing obligations under the tenancy.
There are still some issues that the proposed legislation needs to give clarity on, such as, student accommodation and what happens if a landlord wants to sell a property with a sitting tenant. Currently, many mortgage providers do not allow a property to be bought with a sitting tenant which can make it difficult for a landlord to sell, especially when a tenant is not at fault and none of the grounds for eviction under section 8 are applicable.
It is possible that landlords who intend to sell their properties in the immediate future may choose to bring that process forward. This could result in a greater number of section 21 notices being served this year before the legislation comes into play. However, with rising interest rates and some landlords paying higher than usual mortgage repayments, we will wait to see whether this becomes a reality. Nockolds’ litigation team specialise in landlord and tenant matters and property disputes.
For further information on any matters raised in this article or any related queries please contact us on 0345 646 0406 or fill in our online enquiry form and a member of our Team will be in touch.