The government has issued its response to its consultation on overcoming the barriers to longer tenancies in the private rented sector in England. The most headline grabbing proposal to come out of that response is the government's announcement that it intends to put an end to "no-fault" evictions by repealing section 21 of the Housing Act 1988. The response will be of particular interest to those involved in the private rented sector, including those with an interest in student housing.
Given the continuing growth and increasing diversity within the private rented sector, the government has been spurred into investigating the need for longer, more secure tenancies. Accordingly, last year it issued a consultation seeking views on longer tenancies and, in particular, the suggestion of a new three-year tenancy model. Since that consultation closed, the government has been analysing the responses and has now announced that:
- the consultation revealed no consensus around mandating a certain tenancy length, whether that be three years, five years or any other term;
- it will "introduce a generational change to the law" to put an end to "no-fault" evictions. At present, after expiry of the fixed term tenancy (which must be a minimum of six months) a landlord can, subject to various conditions, serve a section 21 notice to end the tenancy. To use section 21 the landlord does not need to show any fault on behalf of the tenant, such as non-payment of rent – hence it is a process for achieving a "no-fault" eviction. The government believes that the abolition of these "no fault" evictions will improve security for tenants and protect them from "having to make frequent and short notice moves, and will enable them to plan for the future";
- to balance out its reforms it will strengthen the grounds for eviction under section 8 of the Housing Act 1988 to allow landlords to serve notice to terminate and regain their property where they wish to sell or move into it. However, to avoid any abuse of these new grounds the government is considering limiting the use of them until the tenancy has lasted for two years;
- it will continue trying to simplify the court process to make it easier to regain possession through the courts; and
- while it reached no firm conclusion as to how rent increases should be dealt with during the term of a tenancy, the government makes it clear that it "does not support the introduction of rent controls to set the level of rent at the outset of a tenancy".
The next step will be a further consultation on "the details of a better system that will work for landlords and tenants". No details are given as to the timetable for the next consultation.
The next consultation will be followed with interest, not only by individual landlords and tenants in the sector but also by those involved in student housing and organisations within the private rented sector (including build to rent) since their business models are based around assured shorthold tenancies.
Rather than stipulating mandatory terms for tenancies in the private rented sector, it seems that the government is looking to increase security for tenants by requiring landlords to always give a reason when seeking to regain possession. However, the government recognises that if it goes down this route and abolishes "no-fault" evictions, it also needs to address concerns from landlords that the current process for seeking possession of properties on fault grounds is fraught with difficulties. Failure to balance both sides of the equation could have the same effect as historic rent controls for which the government notes there is evidence "that these would discourage investment in the sector, and would lead to declining property standards as a result" – the very thing that surely all parties want to avoid with the current proposals for reform.