Sponsored Editorial by Jason Bunning, lettings director of Wards

This month has been a whirlwind for the entire housing sector, but the rental market definitely has taken the biggest steps of change.

The published Renters’ Reform Bill looks to have a good amount of ‘oomph’ behind it, but landlords are already feeling the pressure.

One of the biggest narratives Wards and other agents can focus on from the Renters’ Reform Bill is Section 21 – or the removal of it, and what that will really mean.

It is fair to say that this is a once-in-a-generation change to housing legislation. In 1988, Assured Tenancies were replaced by Assured Shorthold Tenancies (made the default type in 1994) but now, Assured Tenancies are coming back – although not in the same way as they were before.

Section 21 was the main difference between an Assured Tenancy and an Assured Shorthold Tenancy.

The Section 21 Notice gave landlords the right and ability to serve notice on a tenant without having a reason – it’s termed ‘no-fault possession’ because with an assured tenancy the tenant (mostly) needed to be at fault for the landlord to get the property back.

A Section 8 Notice is used on an Assured Tenancy, which are also used to recover possession when there are significant rent arrears.

So does the removal of Section 21 mean the end of no-fault possession? Not necessarily.

Within the bill are additional grounds, and some tweaks to existing ones, that actually give landlords some options regarding their let.

Suffice to say landlords are covered in the most frequent scenarios where Section 21 was used, including the landlord or close family member moving into the property, mortgage repossession and the landlord selling the property.

The legislation and guidance requires there to be proof of the ground being used and, where a landlord is selling or moving back in, the property may not be remarketed to let for three months following the expiry of the notice.

The above grounds give mandatory rights to possession, meaning if the tenants don’t leave at the end of the notice period the landlord applies to court for a possession hearing, attends with the proof of selling or wanting to move back in and is awarded possession back.

The same protection from eviction exists with Section 21 so it’s unlikely we’ll see more cases go to course for possession if tenants don’t vacate.

You can only recover possession of a property with a court order if the tenants do not surrender – the deterrent to the tenant is that the costs of the landlord's application can be passed to the tenant when the landlord is awarded possession.

In most cases, the removal of Section 21 won’t prove too much of an issue.

Ask any landlord why they want to serve notice on their tenants – 99% of the reasons are covered in the above grounds or for rent arrears three times or more in a three-year period.

The expectation in the legislation is that tenants should vacate when the notice expires, just like most do currently with Section 21 Notices.

When it comes to no more fixed-term tenancies, that point is worth a quick unpack.

Around six months after the regulation becomes law, all new tenancies will effectively be periodic from the start, with two months’ notice needed from either tenant or landlord (landlords will be restricted from use in the first 6 months as they are now with Section 21).

The 12 months after that, it will apply to all existing tenancies.

No more fixed terms doesn’t really give landlords or tenants the stability and security they are used to, but it does give tenants the ability to move out of poor quality properties or away from bad situations.

Tenants will still want to live in properties and have long-term stability so I don’t foresee good properties and good landlords with any new issues, which is why it’s so important to get yourself in the best position possible with your let.

If you have any queries, or just want a chat about how we can help you and your property, get in touch with one of our lettings experts.

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