Greater protection for tenants with the end of no-fault evictions
The Government has announced plans to scrap ‘no fault’ evictions with a new open-ended rental system envisaged. Such a system could mirror that introduced in Scotland two years ago and systems already operating in other European countries.
Currently most renters take an Assured Shorthold Tenancy for either six months or a year, although some are on a periodic tenancy which rolls from week-to-week or month-to-month. Where the Landlord gives notice two months prior to the end of the tenancy (a Section 21 notice) they may evict the tenant without needing to provide a reason. If, then, the tenant does not leave the property at the end of the term, the Landlord can apply for a court order.
However, the fact that landlords can obtain possession by serving notice after just six months on a whim means that many tenants find themselves bearing the cost of moving frequently and may struggle to locate suitable affordable properties in their chosen area. Even where suitable properties are available, there is no guarantee that a prospective tenant’s application will be accepted and the tenant could find themselves homeless.
According to the English Housing Survey, there are more than 4.5 million privately renting households and the percentage of households renting privately has doubled from 10% to 20% since 2002. Homeless.org reports that the ending of an Assured Shorthold Tenancy is now the number one reason for homelessness. Chief Executive of Shelter Polly Neate commented:
“…we frequently hear from people with contracts shorter than your average gym membership, who live in constant fear of being thrown out at the drop of a hat. Ending Section 21 evictions will transform these renters’ lives – giving them room to breathe and put down roots in a place they can finally call home.”
Communities Secretary Rt Hon James Brokenshire MP stated:
“Everyone has a right to the opportunities they need to build a better life. For many, this means having the security and stability to make a place truly feel like home without the fear of being evicted at a moment’s notice.”
With a view to ending the unsatisfactory cycle, ministers have announced that they will hold a consultation before summer on scrapping no-fault evictions which would give tenants more security and peace of mind. This follows a consultation that was completed by the Ministry for Housing, Communities and Local Government last summer which recommended extending the minimum length of a tenancy to three years with a ‘break clause’ after six months where both the landlord and tenant wanted to end the agreement.
The current proposals have already received mixed reactions: whilst homelessness charities have welcomed them, one group representing landlords has said it could lead to chaos. Taking away the ability for a landlord to evict at the expiry of an Assured Shorthold Tenancy will mean that in many cases, their only recourse is to court: but according to the National Landlords Association, the reason so many no-fault evictions are used is because the court process for repossession is slow and expensive.
Under the proposals, Landlords would still be able to evict tenants where there was good reason: for example, the tenant did not pay the rent, caused a nuisance or damaged the Landlord’s property. Ministers have stated that such court processes will be sped up so that Landlords can regain their properties swiftly where there is a legitimate dispute. Ministers have also proposed to amend the Section 8 eviction process, so landlords looking to sell the property or move into it would also be able to serve notice.
Landlord groups have also pointed out that this measure is yet another burden on the buy-to-let market which has already endured a reduction in tax relief on mortgage interest payments and the removal of the basic wear and tear allowance, plus an addition 3% to pay on ‘second home’ properties. Such measures appear to be impacting the market substantially, with a reduction in the number of buy-to-let loans from a high of 346,000 down to 235,000 in 2018 reported by UK Finance in the Times.