Update: Proposed Changes to Residential Evictions – “A Game Changer”

The Renters (Reform) Bill, introduced into Parliament last month (17 May 2023), is a Government Bill which makes provision to change the law concerning rented properties including the abolishment of fixed term assured shorthold tenancies. The Government has introduced such landmark reform in order to a deliver a fairer private rented sector for both tenants and landlords, in accordance with its 2019 manifesto commitment to scrap Section 21 ‘no fault’ evictions.

The UK government’s proposal to limit a residential landlord’s ability to evict tenants without a specific reason has been met with mixed reactions. Described as “the biggest shake-up of the private rented sector in a generation”, the Bill proposes a ban on landlords evicting their tenants without providing a legitimate ground such as where a landlord seeks recovery of the property if they intend on selling or using the property as their principal home. As the law currently stands, landlords are able to serve their tenant with a Section 21 notice which allows them to terminate tenancy agreements, giving their tenants 2 months’ notice before making an application to the court for an order to evict them.   These have become known largely as “no fault” evictions.    The Bill indicates that a new ombudsman will be set up to oversee dispute resolutions whilst it will also enable tenants the legal right to request a pet in their home with a veto blanket ban on no-children or claimant stipulations. According to Housing Secretary, Michael Gove, the proposed changes are said to come into force by the end of the year in order to give renters a “fairer and better deal”.

While this seems like a very reasonable and favourable proposal to many UK tenants, there is concern in some circles that the reforms may have unintended consequences, primarily as they could cause many buy-to-let landlords to reconsider whether the market is still attractive to them. With the currently ever increasing interest rates making buy to let investments less attractive to investors, the reforms risk putting would be landlords off from entering the rental market meaning a further reduction of available housing for rent from an already shrinking market. In addition, the new legislation may lead to an increase in rental prices, which would be very undesirable for tenants already struggling to afford housing.    The landlords who choose to remain in the market may have to increase their rental prices in order to maintain profitability, given the restrictions on their ability to evict tenants. This would make renting even more unaffordable for many people, exacerbating the current housing crisis.

Only time will tell how the proposals will impact the rental market but for landlords and tenants alike, there will still remain times of crisis.  The reforms will not mean that sometimes things will go wrong in the landlord tenant relationship and Keelys are here to help if it does.  For further information and/ or to discuss the position in further detail, please contact our Patrick Farrington in the Litigation and Dispute Resolution Department at pfarrington@keelys.co.uk.

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