Jessica Harris discusses Labour’s plans to abolish section 21 ‘no-fault’ evictions in EPrivateClient

Jessica’s article was published in EPrivateClient, 8 August 2024, and can be found here.

Labour’s plans to abolish section 21 ‘no-fault’ evictions are destined to fail

Following their victory in the 2024 general election, Labour stated they will abolish section 21 ‘no-fault’ evictions. The King’s Speech confirmed that the abolition of s21 will be part of a new Renters’ Rights Bill that could receive Royal Assent by 2025, if not before the end of this year.

S21 of the Housing Act 1988 gives landlords the right to recover possession of their rental property by serving a minimum of two months’ notice in writing to the tenant to bring the tenancy to an end. The landlord cannot do this during a fixed term tenancy unless there is a break clause. It is referred to as a ‘no fault’ eviction as landlords don’t need to give a reason why they wish tenants to leave.

The proposed changes will supposedly simplify tenancy structures by moving all tenancies to periodic: the tenancy will end only if the tenant chooses to leave, or if the landlord has a valid reason, as defined by law through ‘Section 8’ grounds. These include the landlord wanting to sell the property, redevelopment or allowing a close family member to move in to rent the property, or if there has been a breach of contract or anti-social behaviour.

On the one hand, the abolition of s21 will give renters more security, and remove the threat that they may receive a s21 notice at any time outside of a fixed term. Some renters feel unable to report disrepair due to concerns that the landlord will serve a s21 notice. However, removing a landlord’s ability to terminate tenancy agreements with two months’ notice, without needing to give a reason (it doesn’t mean there isn’t one), will cause profound upheaval in the private rented sector.

Crucially, since s21 is a ‘no fault’ possession notice, it’s impossible to know why the notices are served. The erroneous view of s21 notices is that it is an unfair eviction notice served indiscriminately by landlords. This is not the case. There is a lack of understanding of the legal system and, arguably, deliberate attempts by politicians to misguide voters. In many cases, s21 notices are served to remove tenants at the end of the fixed or periodic term that have violated the terms of their tenancy agreement. But this is not made clear.

When dealing with difficult tenants, it’s often easier to issue s21 notice and wait for the fixed or periodic term to end before repossessing the property, rather than serving a s8 ‘with grounds’ eviction notice, and potentially have the ground(s) for eviction contested in court by the tenant; a lengthy process. Without recourse to s21 landlords will be left unfairly exposed; a short-sighted ploy to gain votes without consideration of the consequences.

Furthermore, it is mistaken to imply that landlords are not interested in long-term good tenants. It is expensive to change tenants, and there are risks attendant in removing good tenants from premises. Abolishing s21 notices may aid in suppressing the operation of the minority of rogue landlords. But at what cost? Abolishing s21 notices will impact tenants more than landlords. There will be a backlash against unintended targets: tenants.

If landlords don’t have an easy method to regain possession, they will either sell, or change to an Airbnb/short-let model, or alternatively become more selective, multiplying difficulties for tenants in securing accommodation. A simple and sensible decision by landlords to make tenant guarantors a requirement will increase the tenant barrier to entry; one many won’t be able to surmount.

Moreover, there will be an increase in s21 notices being issued before the deadline, by landlords that have noticed concerning behaviour from current tenants. This is because once the ban is implemented, landlords know it will become more difficult to resolve issues if they escalate.

A further consideration is the likely response of insurance companies: legal costs for evictions will suddenly become more expensive, resulting in higher premiums. Landlords will have to contend with increased operational costs.

Landlords currently heavily rely on s21 to evict rogue tenants – a process that is not resource heavy on the courts. But what will happen once s21 is abolished? There will be an increase in the usage of the resource-hungry s8 route. Unfortunately, our courts are already overwhelmed with s8 eviction cases. Labour have assured us that there will be funds made available to our legal system to handle the expected increase in s8 cases after s21 ceases to exist (itself perhaps an admission as to how misleading the s21 statistics are). But the government won’t be able to direct sufficient resources into the legal system to produce an effective eviction process. Most landlords share the same concerns, which is why it will only result in increased hardship for tenants to locate accommodation.