Rental reforms: government announces Section 21 U-turn

Plans to scrap Section 21 evictions as part of widespread rental reforms have been paused, the government has announced.

As the Renters’ Reform Bill passes through parliament, its headline policy has been delayed while a new measure has been proposed to protect the student housing market.

Read on to find out what the changes to rental reforms mean for landlords in England, plus the latest on the Renters’ Reform Bill’s journey to becoming law.

Plans to scrap Section 21 evictions put on hold

Draft legislation for the Renters' Reform Bill published in May includes the measure to scrap Section 21 evictions. This means a tenancy would only end if a tenant ends it or a landlord has a valid reason, defined in law.

However, in response to a report from the House of Commons Housing Select Committee, the government has confirmed that it “will not proceed with the abolition of Section 21, until reforms to the justice system are in place.”

The U-turn came just a few days before the bill’s second reading in the House of Commons.

The government has suggested making several changes to the justice system before abolishing Section 21:

• prioritisation of certain cases, including antisocial behaviour
• digitisation of the court process
• improving bailiff recruitment, retention, and enforcement
• strengthening mediation and dispute resolution through the introduction of a new ombudsman
• providing early legal advice and better signposting for tenants

What does this mean for landlords?

Many landlords will be pleased the government is committing to improving the court service before scrapping Section 21.

Our survey of almost 1,500 landlords revealed how they felt about the original plans:

• 66 per cent thought the evictions process would become more expensive and time-consuming
• 63 per cent thought it would be harder to regain possession of a property
• 54 per cent thought landlords would sell up and leave the market as a result

Due to the substantial nature of the proposed court changes, they could take some time to implement. This means Section 21 evictions will remain in the short term, potentially while other rental reforms are gradually introduced.

Landlords relieved as protection for student tenancies confirmed

Another measure included in the Renters’ Reform Bill is to end fixed-term tenancies of six, 12, and 24 months, making all tenancies rolling with no fixed end date.

This proposal has caused concern among student landlords, many of whom use fixed-term contracts to align with the academic year.

It was argued that removing contract end dates could reduce the chances of students moving out in time for landlords to market the property and prepare it for the next set of renters.

In response, the government has said it will “introduce a ground for possession that will facilitate the yearly cycle of short-term student tenancies”.

Rental reforms pass second reading – what happens next?

The significant proposed changes to the Renters’ Reform Bill came a few days before its second reading in the House of Commons.

The bill passed its second reading on 23 October 2023. It will now move to the committee stage, when it will be scrutinised line by line.

Introducing the bill at the second reading, Michael Gove, secretary of state for Levelling Up, Housing and Communities, committed to the removal of Section 21 and acknowledged the issues the bill poses for student landlords.

There was also debate on the planned changes to the court system, which were criticised by Shadow Housing Minister Angela Rayner.

She said: “The Conservatives’ long-promised ban on no-fault evictions has majority and cross-party support, but this flip-flop kicks it into the long grass.

“This comes at a heavy price for renters who have been let down for too long already.”

Changes expected during the committee stage

No date has been set for the committee stage of the Renters’ Reform Bill, but it’s due to be completed by 5 December 2023.

According to the National Residential Landlords Association, it’s likely that there will be “significant alterations” to the bill as it’s reviewed.

During the committee stage the bill will be scrutinised by external experts, with proposed amendments put to a vote.

After the committee stage, the bill will pass through a report stage and third reading. It will then go through the same process in the House of Lords, before reaching the final stages and becoming law.

Rental reforms included in King’s Speech

Another sign of the Renters’ Reform Bill progress is its inclusion in the King’s Speech on 7 November.

The address, which was King Charles’ first since his coronation last year, outlined the government’s plans for new laws over the next year.

The King’s Speech marks the start of the next session of parliament and is highly likely to be the last before the next general election, which could happen next autumn.

Although including rental reforms in the King’s Speech shows they remain a priority for the government, it’s still unclear when new laws might take effect.

You can track the progress of the Renters’ Reform Bill here and keep an eye on our Knowledge centre for updates on rental reforms.

What do you think about the government’s plans to delay scrapping Section 21 evictions until the court system is improved? Let us know in the comments below.

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