Section 21 notices of eviction in the private rented sector are facing an imminent overhaul, according to recent measures proposed by the Government. Bray & Bray explains the forthcoming changes to these eviction notices and their significance for both landlords and tenants.
The new measures, intended to be brought in as soon as possible, will mean private landlords can no longer evict tenants from their homes using a Section 21 notice.
What is a Section 21 notice?
A Section 21 notice is often the first step that landlords take to begin the eviction process of tenants living at their property. It is only valid for properties let on an assured shorthold tenancy.
Currently, landlords do not need to give a reason for why they have chosen to issue a Section 21 notice and begin the process of eviction. They are required to give tenants a minimum of 2 months’ notice to leave the property, though sometimes more time is given to those who have a longer tenancy period.
What are the proposed Section 21 changes?
- Landlords will still be able to end tenancies where they have a legitimate reason to do so.
- Legitimate reasons can include non-payment of rent, lease violation (such as unauthorized pets, unapproved subletting, or nuisance complaints) property damage, illegal or drug-related activity or evidence that the tenant is no longer living at the property.
- Landlords will now have to use Section 8 of the Housing Act to evict tenants, which requires them to provide a justifiable reason for eviction.
- The minimum notice period will be extended from the 2 months that it currently is now.
- New measures will also be put in place for court processes to be expedited where there is just cause for tenants to be evicted, making the eviction process a lot faster than it is now.
Why are these changes problematic?
These new changes add to the increasingly difficult rental climate for landlords, the vast majority of whom provide safe homes for their tenants and treat them responsibly.
In the last three years, landlords have seen an additional 3% added to their stamp duty land tax bill, plus the enforcement of Selective Licensing Schemes by many councils across the UK, as well as stricter regulations required on electrical inspections.
There’s also been a substantial reduction in mortgage interest tax relief; this tax year, landlords can only deduct 25% of the interest on their mortgage from their rental income. By 2020, the mortgage interest tax relief will be phased out altogether. The introduction of the 20% tax credit also means that higher and additional rate taxpayers will see their tax bills climbing higher and higher.
These significant changes, coupled with the continued uncertainty over the effect of Brexit on the buy to let market, have left a number of landlords questioning if the rental market is still a worthwhile venture.
Tim Bennett, Partner and Head of Bray & Bray’s Dispute Resolution and Commercial Litigation Department, explains:
“Although the proposed changes to Section 21 notices may feel like another blow being dealt to landlords, the proposed measures are, in some ways, favourable for them too. The acceleration of court proceedings will be hugely beneficial in speeding up the process of taking back their homes where tenants have fallen behind on rent or damaged the property. A process that, currently, is often subject to delays and can result in unnecessary costs for landlords.”
Speak to our team
For further information or advice on the proposed changes to Section 21 notices, or for guidance on dealing with any landlord and tenant issues, speak to a member of our Dispute Resolution team.
Bray & Bray have three main offices across Leicestershire and one in Corby. Please feel free to get in touch to talk to one of our solicitors.
Leicester 0116 254 8871
Hinckley 01455 639 900
Market Harborough 01858 467 181
Corby 01536 851 050