As the nights become more gloomy and house prices begin to frost, the government have provided some much needed warmth to the hearts British of landlords. The government recently acknowledged the need to reform the court system prior to abolishing Section 21 eviction notices. In effect, delaying the abolition of ‘no-fault’ evictions indefinitely.
Housing Court Reform is Needed
In February of this year, the Levelling Up, Housing & Communities Select Committee released the report: ‘Reforming the Private Rental Sector’ in response to the government’s pledges to reform the UK’s rented housing sector. In the report, the Select Committee strongly advocated the creation of a specialist housing court as ‘the surest way of unlocking the housing court process’. Notwithstanding the creation of a standalone court, the Select Committee was resolute in recommending that the government should agree to how quickly courts should be processing possession claims and commit to meeting this target before abolishing Section 21 Notices.
Section 21 Notice Abolition Has Been Delayed
In response to the Select Committee’s recommendations, the government highlighted that it is taking steps to work alongside the Ministry of Justice and HM Courts to reform and improve the court possession process. More importantly, the government confirmed that the implementation of a new system to replace Section 21 would not take place until they have judged that sufficient progress has been made to improve the courts. Specifically, the government hopes to achieve the following before rolling back Section 21 Notices:
- Digitise more of the court process to make it simpler and easier for landlords to use.
- Explore the prioritisation of certain cases including antisocial behaviour.
- Improve bailiff recruitment and retention and reduce the administrative burden on bailiffs to prioritise possession enforcement.
- Provide earlier signposting and legal advice to tenants, including help to allow them to find a housing solution that meets their needs.
In short, the government’s response indicates an understanding that significant steps must be taken to expedite and enhance the court repossession process before they can replace Section 21 Notices. Nonetheless, the government still intends to proceed with the abolition of ‘no-fault’ evictions, albeit with a more rational – if still uncertain – timeline.
Reception Amongst Landlords
On the face of it, any news that the abolition of Section 21 Notices will be delayed will be received warmly amongst landlords. However, this may only be a slight ray of light through the ongoing storm. The government remains committed to the removal of Section 21, even if the timeline is now more ambiguous. With this comes the dawning realisation that landlords are going to forsake more rights over their own properties and face costlier evictions in the future, irrespective of court reform.
Frustratingly, the simple fact remains that few, if any landlords, choose to evict good tenants. The argument that landlords randomly seek to evict low-maintenance tenants of their own volition is spurious, to say the least. In reality, many landlords utilise Section 21 notices as a cost and time-effective method of ending tenancies with problematic tenants, a process which will become more difficult and costly once the notices are repealed.
Most Tenancies are Ended by Tenants
In business and in life, not all relationships work out. Tenancies are no different to this and it is only natural that a proportion of tenancies will come to an end. In reality, the overwhelming majority of tenancies are ended by tenants, rather than landlords. Data suggests that 90% of tenancies are ended by tenants themselves, with the remaining 10% split between no-fault and at-fault evictions (O’Leary, O’Shea, & Albertson, 2018). Furthermore, the government’s intention to annul fixed-term tenancies will only increase the flexibility of tenants in the private rental sector.
In the small number of cases where landlords are responsible for ending tenancies, which comprise a vast range of possible reasons from antisocial behaviour through to seeking to sell their properties, there currently exist two options. Firstly, landlords can proceed down the more formal route of issuing a Section 8 notice, which comes with a list of applicable grounds for repossession. However, issuance of such notices can be costly both in terms of court fees and time, with many tenants challenging or appealing the grounds for eviction. Otherwise, landlords have been able to issue Section 21 Notices, which notify tenants of the end of their tenancy and are often both simpler and more cost-effective.
Removal of Section 21 Will Still Cause Problems Later On
Herein lies the frustration for many landlords. Irrespective of the court system’s efficiency, the removal of Section 21 Notices will remove a key tool which enables landlords to be more effective and flexible. Not all cases of tenant behaviour are black and white, with many landlords wishing to proactively issue eviction notices before a major issue occurs. In the future, all evictions will now have to become formal and costly endeavours. The very same people who would have been quickly and efficiently evicted using Section 21 Notices, will invariably now be evicted using a more costly and complex court process, eating up administrative time to the benefit of no one and only at the cost of already embattled landlords.
Section 21 Abolition Has Not Been Scrapped Just Delayed
The Government has pledged that section 21 ‘no fault’ repossessions will not be scrapped until improvements have been made to the way courts handle legitimate possession cases.
The move was confirmed in the Government’s response to the Levelling Up, Housing & Communities Select Committee’s ‘Reforming the Private Rented Sector’ report on the forthcoming Renters (Reform) Bill. You can access the Government’s response in full here.
The Current Housing Court System is Failing
At present it takes an average of over half a year for the courts to process possession claims where landlords have good cause, such as tenant rent arrears or anti-social behaviour.
The National Residential Landlords Association (NRLA) has long argued that without quicker court processes, responsible landlords would simply leave the market following the abolition of section 21, at a time when renters are already struggling to find a place to live.
Responding to a report from the House of Commons Housing Select Committee ahead of MPs debating the Renters (Reform) Bill on Monday, the Government has confirmed that implementation of the new system for repossessing properties “will not take place until we judge sufficient progress has been made to improve the courts.” It continues: “That means we will not proceed with the abolition of section 21, until reforms to the justice system are in place.”
The Government are Introducing A Ground for Possession for Student Tenancies
Alongside this, the Government has agreed with the NRLA’s call for a new ground to repossess properties to protect the yearly nature of the student housing market. By scrapping fixed term tenancies, the NRLA warned that neither landlords, nor students, would have any certainty that properties would be available to rent at the start of each academic year.
The Government has said it will “introduce a ground for possession that will facilitate the yearly cycle of short-term student tenancies” which “will enable new students to sign up to a property in advance, safe in the knowledge they will have somewhere to live the next year.”
Ben Beadle, Chief Executive of the National Residential Landlords Association, said:
“Reform of the rental market will only work if it has the confidence of responsible landlords every bit as much as tenants. This is especially important given the rental housing supply crisis renters now face.
“Following extensive campaigning by the NRLA, we welcome the approach taken by ministers to ensure court improvements are made before section 21 ends. The Government is also right to protect the student housing market. However, more is needed to ensure student landlords are treated the same as providers of purpose-built student accommodation.
“We will continue to engage positively with all parties as the Bill progresses through Parliament.”
If you’d like to read the Government’s response in further detail, click here to access the relevant document.