The government has pledged to give six months’ notice before transitioning to a new system where Section 21 is abolished and tenancies are simplified.
As well as the much-publicised ban of Section 21, the government has opted to move to a single system of periodic tenancies in the White Paper entitled ‘A Fairer Private Rented Sector’.
This will mean that fixed term tenancies will be scrapped, where as it stands tenants are liable to pay the rent for the duration of the term but they can’t be evicted using Section 21. Once everything moves to the periodic model tenants will always be able to depart after giving notice.
A ban on Section 21 was first promised in April 2019, and the government has attracted a lot of criticism from housing charities for seemingly dragging its feet on the ban.
The government said: “We will allow time for a smooth transition to the new system, supporting tenants, landlords and agents to adjust, while making sure that tenants can benefit from the new system as soon as possible. We will implement the new system in two stages, ensuring all stakeholders have sufficient notice to implement the necessary changes.
“We will provide at least six months’ notice of our first implementation date, after which all new tenancies will be periodic and governed by the new rules. Specific timing will depend on when Royal Assent is secured.
“To avoid a two-tier rental sector, and to make sure landlords and tenants are clear on their rights, all existing tenancies will transition to the new system on a second implementation date. After this point, all tenants will be protected from Section 21 eviction. We will allow at least twelve months between the first and second dates.”
To accompany these changes a new Ombudsman will be established in order to ease the burden to courts, which all private landlords will be made to join.
Alongside the Ombudsman the government will look at how rent repayment orders can be expanded to enable tenants to be repaid rent if they end up living in non-decent homes.
Tom Mundy, chief executive at lettings platform Goodlord, said: “[Some] changes are causes for concern, such as moving all renters onto a single system of periodic tenancies and how the scrapping of Section 21 will work in practice.”
Following the reforms landlords will only be able to increase rents once a year, while tenants will be able to challenge unjustified increases through the First-tier Tribunal. This change is designed to stop landlords from effectively kicking out their tenants by rapidly increasing rents.
The government said it would consider amending the Protection from Eviction Act 1977 to help local authorities tackle illegal evictions, for example permitting local councils to issue civil penalties for cases of illegal evictions and harassment; and looking at how local councils can be supported to work effectively with the police.
With so many changes taking place, Guy Coggrave, managing director of surveyor firm GSC Grays, warned that government plans could drive landlords out of the sector and see more properties used as holiday lets.
He said: “Landlords will need to consider the implications of the legislation carefully before renewing any existing tenancies or offering properties to let in the future.
“We expect this will lead to more properties being sold or used as holiday lets and therefore lost to the private rental sector, which conversely may lead to increased rents and living pressures for renters.”
On a more positive note, Paul Wootton, Nationwide Building Society’s director of home propositions, said the reforms are likely to drive up the quality of housing across the UK.
He said: “As a buy-to-let lender we are keen to understand more about how the changes will be implemented, to ensure we fulfil our important role of balancing the needs of landlords as well as tenants. We are keen for the legislation to be delivered as soon as possible as the rising cost of living is continuing to exacerbate the issues the Renters Reform Bill is looking to address.”