Section 21 Going Before the Next General Election
Remember when we reported that the Section 21 ban had been kicked into the long grass? Well it looks like that delay has now been walked back…
The will-they-won’t-they drama surrounding Section 21 has been going on for years. First promised in 2019, the ban was initially delayed by the pandemic and late last year was pushed back to make way for court reforms first. Now new rules are coming around short-term lets.
What is Section 21?
In case you don’t know, Section 21 is a piece of legislation that allows landlords to repossess their property after a fixed term tenancy ends or during a periodic tenancy.
Section 21, is commonly known as the ‘no fault’ notice – meaning exactly that, the tenant isn’t at fault, but the landlord needs the property back, perhaps because they are planning to sell up, for example.
The government promised the ban on Section 21 to give renters more security, but it has landlords worried about being able to repossess if they need to. Towards the end of 2023, New City Hall analysis found that 290 London renters per week faced no-fault evictions since the government vowed to ban Section 21. This implies that landlords are becoming far more risk averse and, without Section 21 to fall back on, landlords may become more choosy about tenants, making it tricky to get a rental if you have the slightest blip in your rental history.
What caused the delay on the ban?
At the end of 2023, Micheal Gove announced that the ban wouldn’t come into force until the courts were ready to handle it. Now, there were several criteria that he cited needed sorting, including but not limited to:
- Digitising the court process as much as possible
- Improve bailiff recruitment and retention
- Proving early legal advice for tenants
- Strengthen mediation and dispute resolution
But now it’s 2024 and we’re barrelling towards a General Election. Prime Minister Rishi Sunak said in January that he expected to call the election in the second half of this year. And so, in the last week or so, Housing Secretary Michael Gove has come out swinging against Section 21 again, telling the BBC in early February that he will outlaw Section 21 evictions before the general election:
We will have outlawed it and we will have put the money into the courts in order to ensure that they can enforce that.
So what does that mean for landlords?
If you’ve been taking our advice when it comes to finding tenants, you aren’t likely to be affected by the ban. Despite salacious headlines that make it sound like landlords are turfing people out left, right and centre, landlords really don’t want to evict unless they have to. If you’ve done all your due diligence, you are unlikely to need to evict a tenant. If you’ve covered yourself with Rent Guarantee and Legal Expense cover, if you do need to, you are likely to find the process much smoother.
However, all of this is a hassle. And the Section 21 ban is just one change expected via the Rental Reform Bill, so there’s a lot of other bits and pieces to keep on top of like:
- Changes in the law regarding pets
- Introduction of an online property portal and ombudsman
- Changes in notice periods
- Making blanket bans on children and benefits illegal
- Strengthening local councils’ enforcement powers
- Application of the Decent Homes Standard to the private rented sector
So while you might be stressing about Section 21 right now – what about all of that, is that even on your radar?
If not, now might be the time to consider working with a letting agent, if you’re not already. They are at the forefront of the industry and will be up to date with the shifting changes that are coming. Making a letting agent part of your team might be the move you need to make to soothe your nerves. If you’re not sure where to start, book a call with us.
What about short-term lets?
With changes coming to the private rental sector via the Renters Reform Bill, a lot of landlords were exploring the possibility of pivoting to short-term rentals instead.
This is something that has communities up in arms, as younger people in destination locations, like Devon and Cornwall,were prices are driven up and properties are snapped up by people investing in holiday lets.
Micheal Gove announced that the changes will include planning permission for future short-term lets and a mandatory national register to provide valuable information and help ensure accommodation is safe. The hope is that new reforms will protect local residents who are being pushed out of their communities, as Mr Gove said:
In some areas, too many local families and young people feel they are being shut out of the housing market and denied the opportunity to rent or buy in their own community. So, the Government is taking action as part of its long-term plan for housing. That means delivering more of the right homes in the right places and giving communities the power to decide. This will allow local communities to take back control and strike the right balance between protecting the visitor economy and ensuring local people get the homes they need.
Property owners will still be able to let out their main home for up to 90 nights a year without planning permission, so there is some flexibility for homeowners to utilise short-term lets for a little additional income for a limited period each year.
The new laws will also not affect hotels, hostels or B&Bs, only short-term lets. So it’s definitely important, if you are considering pivoting from long-term to short-term, to do your research and understand the additional hoops you will need to jump through. It’s likely that the short-term let solution won’t be easier to manage than long-term lets, if the government plans come into affect.
