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1 in 4 landlords would sell property if “no fault” evictions are abolished. Here’s what it would mean

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The government has said it will abolish “no fault” evictions next year. The move aims to improve the rental sector, but research suggests that few landlords agree with the decision. If you have buy-to-let property, here’s what it could mean for you.

No fault evictions allow private landlords to evict tenants without any reason. Tenants that have received a Section 21 no fault eviction notice usually have two months to leave their homes.

In 2019, the Conservative Party committed to ending Section 21 no fault evictions but there have been several delays. However, former prime minister Liz Truss confirmed that the abolition would go ahead, and it’s expected to become law in 2023.

Why is the government abolishing no fault evictions?

Calls to end no fault evictions have been increasing from housing organisations for several years. They state that tenants face constant uncertainty and additional costs due to no fault evictions.

According to Shelter, losing a private tenancy is the second biggest cause of homelessness in England. The organisation also notes that the cost of living crisis will mean that many families will struggle to absorb the costs associated with moving home.

Shelter estimates that landlords hand a no fault eviction notice to private renters every seven minutes in England.

Just 22% of landlords support abolishing no fault evictions

Separate research suggests that the decision to abolish no fault evictions isn’t popular among landlords.

According to Nationwide, just 22% of landlords are supportive of the move. The main reason for this is a concern that they could be left vulnerable to difficult tenancies.

In response to the abolishment of Section 21, 56% of landlords said they’d be more particular about the tenants they accept. 25% also said they would sell some or all their properties.

So, in practice, what would abolishing no fault evictions mean for landlords?

Section 21 is often preferred when taking possession of a property as it’s quicker and less expensive than other options.

If a Section 21 case is taken to court, so long as all the conditions are met, it will be upheld. As a result, it’s often viewed as a reassuring safety net for landlords.

If the government abolishes no fault evictions, landlords will instead have to rely on Section 8 if they want to seek possession.

Under Section 8, landlords must provide an evidenced reason to show that the eviction is appropriate. Among the grounds for using Section 8 are:

  • The tenant not paying their rent, or paying it late
  • Breaching the tenancy agreement, for instance, having a pet if this isn’t allowed
  • The tenant damaging the property
  • The property requiring redevelopment.

You may also use Section 8 if you want to use the property as your main home.

Even if you provide grounds for handing out a Section 8 notice, it doesn’t automatically mean it will be upheld.

In some cases, the grounds are discretionary. The tenant will be able to defend the Section 8 notice. They may, for example, explain what they’re doing to put things right, such as paying missed rent, and why it won’t happen in the future.

A judge may also decide to issue a suspended possession order, which would provide the tenant with one last chance.

The government has said it will strengthen Section 8 grounds for possession, including stronger grounds if a tenant repeatedly falls into arrears and to deal with antisocial behaviour. It also claims it will make the process smoother and quicker, to provide landlords with more security.

It’s hoped that with the combination of reforms, by abolishing Section 21 and strengthening Section 8, it’s possible to strike a balance to provide security for both tenants and landlords.

Understanding what the changes could mean for you

As a landlord, it’s important to keep up to date with changes that could affect you and understand whether they mean buy-to-let properties are still right for you.

We can offer you support with your mortgage needs so that you can get the most out of your investment and refer you to a specialist if you need support in other areas, such as legal guidance. Please contact us to talk to our team.

Please note: This blog is for general information only and does not constitute advice. The information is aimed at retail clients only.

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