After much political discussion, we now know that the ability for landlords to terminate assured shorthold tenancies via Section 21 notices (“no fault evictions” in the political parlance) is to be ended by legislation in this parliament. A new white paper establishing new guidance was published on Thursday 16th June.
Action has, however, already been undertaken in Wales where the Renting 91s (Wales) Act 2016 is now coming into force. In that Act:
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Notice periods for “No fault” evictions have been raised from two months to six
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Measures have been included to allow for greater succession of tenancies
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Standardised tenancy agreements are introduced
Media commentary has highlighted concerns of private landlords fearing that they will effectively have to leave the market and stop renting due to the added burdens and risks that the Act will place on them, while also highlighting fears around the reduction of housing stock that may be available for private rent, if landlords leave the sector.
These concerns are nothing new and have been raised by landlord groups and other housing sector professionals since moves to end no fault evictions were first mooted some years ago.
The inherent flexibility of the Assured Shorthold Tenancy can fairly be criticised for not providing security for long term renters.
However, it is worth recalling that Assured and Assured Shorthold tenancies were introduced precisely to encourage private landlord to rent their homes by allowing greater flexibility and the ability to charge a market rent – as against the cumbersome and often financially unremunerative strictures that governed renting before it.
What the reporting from Wales shows is that measures in England of the kind contemplated by the Government are likely, at least in the short term, to risk a chilling effect on the private rented sector – at a time where more, not less, rented housing stock is needed.
If no fault evictions are indeed brought to an end, or severely restricted as they are in Wales, the Government is going to need to very carefully consider what other measures will be needed to persuade private landlords to remain in the market. Some such measures might include:
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Finding a way to speed up the court process for eviction after service of a lawful notice. Currently, in London, even the so called “accelerated” possession procedure takes months, not weeks, to lead to a possession order.
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Finding sensible and pragmatic method for the review of rent where tenancies are either renewed or carry on for an extended period without the need for strict, centralised controls.
If landlords are going to remain in the market, they must have confidence that the court system will be able to deliver possession swiftly after a notice period ends and that they will be able to charge a fair rent that reacts to market conditions.
Above all, Government must ensure that is measures do not form a break on the burgeoning Build to Rent sector. The Government is keen that rented homes should be of good quality, providing community cohesion and, of course, good availability. The Build to Rent sector is founded on providing these things, but if investors are put off by Government measures, and the sector stagnates, the Government may find itself at risk of pushing two sources of housing providers out of the sector, just when they are most needed.