The Independent has reported that a Jeremy Corbyn lead Labour Government would end ‘no-fault’ evictions in order to give stability to tenants and tip the balance of power away from landlords and towards tenants.
What does this mean?
The term ‘no-fault evictions’ is a reference to section 21 notices given by landlords and evictions following them; these notices do not require the landlord to specify any reason for evicting the tenant. Private landlords in England may serve a section 21 notice after four months have passed from the start of a tenancy, and the notice may require the tenant to leave the property two months later. The notice will be effective as long as the landlord complies with various technical requirements and the fixed term of the tenancy is over (or the landlord has a break clause).
Scrapping section 21 notices would mean that private landlords could only evict tenants by serving a different type of notice and proving that certain ‘Grounds for Possession’ apply. This is most often rent arrears or breaches of the tenancy agreement but other grounds cover specific situations. Sometimes the landlord needs to persuade a judge that it is reasonable to evict the tenant as well as proving the ground.
The impact for tenants would be that if they paid their rent and kept to the terms of their tenancy agreements they would usually be able to stay indefinitely in their properties.
Which tenancies would be affected?
Housing legislation passed by a Jeremy Corbyn-led government would apply to England only, since housing is a devolved issue. This policy would apply only to Assured Shorthold Tenancies – but this type of tenancy makes up the vast majority of private sector lettings.
However, it is unlikely that the new rules would apply to existing tenancies because this would probably breach landlord’s rights to ‘peaceful enjoyment’ of their possessions under the European Convention on Human Rights. Primary legislation would be needed and it is likely that after a cut-off date all new private tenancies could not be ended by a section 21 notice.
What if landlords need to move back into or sell their properties?
One of the grounds for possession already covers the situation where a landlord or their spouse or civil partner want to move into the property – it is just not used very much because section 21 notices are easier.
However, there is currently no ground for possession which allows the landlord to evict tenants just to be able to sell the property with vacant possession, meaning that properties would have to be sold with the tenants in place.
When might this happen?
This policy is extremely unlikely to be adopted by the current Government so the earliest time the law could be passed is after the next General Election. That might be as far away as May 2022. Since primary legislation would be required it would take some time after that before these rules could be in force.
How likely is this proposal to become law?
Not only would Labour need to be the largest party after the next election, but a Labour housing bill applying only to England would need to pass through the ‘English Votes for English Laws’ rules in the House of Commons. That may prove to be a problem.
This policy announcement could turn out to be merely a ‘trial balloon’ – a policy announcement put out to test public opinion. If this policy is unpopular with swing voters it could be quietly shelved.
How would this affect the private rented sector?
Making it more difficult to evict tenants is likely to have an impact on the supply of properties made available for letting by private landlords. The perception that tenants cannot be evicted regardless of what they do will affect landlord behaviour, even if that perception is not quite accurate.
However, at this stage it is far too early to carry out any detailed analysis of Jeremy Corbyn’s announcement because the effect of scrapping section 21 notices will be tied up with the policy Labour ultimately adopts in relation to rent control. If section 21 notices are abolished without new rent controls being introduced this may result in rent increases being used as an alternative way for landlords to recover possession of properties. Since rent control is already a hot political topic we can expect Labour to develop further policy on this.
There is every indication that the private rented sector will be a key battleground in the next general election and this means that any of the major parties may embrace a radical re-design of the legal framework of private sector tenancies as we have seen in Wales and Scotland.