Following our last publication, the Renters’ Rights Act, which was introduced in September 2024, has now received Royal Assent and is expected to come into force around Spring 2026.
The Act will be a major reform to current residential tenancy legislation and amongst other things, will increase tenant protections by abolishing ‘no fault’ evictions pursuant to Section 21 Housing Act 1988 and extending the current notice period under which possession can be sought.
These changes are seen by many landlords as another blow in the increasingly volatile private rental sector, with some sources encouraging landlords to bring tenancies to an end before it becomes harder to reclaim possession of their properties from difficult tenants.
So, are the reforms all bad for residential landlords?
What is a Section 21 notice and why is it being abolished
A Section 21 Notice is a form of “no fault” eviction which can currently be relied upon by landlords to end a tenancy without a specific reason, simply by giving 2 months’ notice in a specified manner, assuming that there are no issues regarding any deposit, EPCs, GSCs, and Prescribed Deposit Information etc.
With a view primarily to provide greater security for tenants and to reduce housing instability, ‘no-fault’ evictions will be abolished entirely, along with all fixed term residential tenancies.
Therefore, landlords wishing to reclaim possession of their property must rely on a statutory ground to end the tenancy under the new extended Section 8 route to possession, bringing them somewhat in-line with the commercial tenancy position.
Ending the tenancy under the new Section 8 procedure
Increasing Tenant Protections
Section 8 evictions are already common-place and can be used by landlords to end a tenancy for reasons such as a tenant’s non-payment of rent or other breach of tenancy, for example, where significant damage is caused to their property.
When the Act comes into force, the current Section 8 grounds will be extended to provide some additional tenancy protections.
Increased notice period required for non-payment of rent
Landlords seeking to use the new Section 8 route to end a tenancy will be required to evidence at least 3 months of unpaid rent before they can serve a valid notice, and to give a notice period of at least 4 weeks. This is an increase on the current 2 months’ arrears and 2 weeks’ notice period.
Whilst the above could arguably leave landlords open to financial difficulties, there is some recourse for them to attempt to reclaim all rent arrears by submitting a money claim when making an application to the court for possession.
Occupation by the landlord or family
Under the current Section 21 procedure, a notice can be served after at least 4 months have passed since the start of the tenancy. If the landlord therefore decides that they or their family want to move back in, there is usually only a relatively short timescale to wait before they can do so.
In contrast, when the Act comes into force, a new statutory ground will be created which will give tenants the right to occupy their properties for at least 12 months before a Landlord can serve notice to end the tenancy on the basis that either they or their family members (e.g. spouses, civil partners, children parents, grandparents etc.) wish to occupy the property.
When the initial protected 12-month term has expired, landlords will be obligated to give tenants at least 4 months’ notice to end the tenancy on the above basis.
As such, under the new regime tenants will be afforded an increased minimum occupancy of at least 16 months.
In addition, to prevent any potential abuse of this new statutory ground, a restriction will be put in place which will prohibit the re-letting of their property for the 12-month period after possession is retaken.
The effect
For landlords investing in long term rental properties, the above changes shouldn’t cause much of a change. Whereas, for those seeking short-term occupation or redevelopment returns, they could have more far-reaching effects.
Widened Section 8 Grounds
That said Landlords do gain some benefit from the extended Section 8 procedure which widens the statutory grounds under which a tenancy can be ended.
The Landlord wishes to sell the Property
A new statutory ground will be created which allows tenancies to be ended with 4 months’ notice on the basis that the property is to be sold, subject to the above protections.
Given that it is not uncommon for a landlords to issue a Section 21 notice so that they can sell the property, the inclusion of the new statutory ground should give them some confidence that they are afforded some of the same rights under the new regime, albeit, with extended notice periods.
Anti-social behavior
Under the new regime, greater protections will be put in place for landlords when their tenants are involved in anti-social behaviour and/or crime connected to the property.
For example, the minimum notice period due to a tenant’s conviction of such an offence will be abolished entirely. As such, landlords will have the right to commence possession proceedings immediately after the notice is served.
The above change can only be seen as a positive for landlords so that they can swiftly remove that type of tenant.
Summary
Section 21 “no fault evictions” are set to be abolished entirely and replaced by the newly extended section 8 procedure. Whilst arguably ‘pro-tenant’, the Act attempts to balance the rights of renters to have security of accommodation in their rent property with a landlord’s right to retain some control over their property and to sell or move back into them.
Until the Act comes into force, landlords can still serve Section 21 or Section 8 notices in their current forms.
Therefore, landlords looking to recover their property quickly and / or to avoid the above developments, they should consider acting now.
Those landlords that plan on remaining within the private rented sector should consider reviewing their position to account for the above imminent changes to the law before it is too late.
Please look out for future articles which will explore the other changes to the private rented sector that will be brought into force under the Act.
If you would like to speak to Richard Dobson Mason, Jackie Martin, or anyone else about Dispute Resolution, please contact our Office on 01457 761 320 and you will be directed to the solicitor who is best equipped to deal with your legal matter.
