Set out in the Conservative 2019 manifesto, the Renters (Reform) Bill (the “Bill”) promised to be one of the most significant changes to the private rental market in over 30 years and is designed to bring about a fairer private rental sector to meet ‘basic decency standards’. The changes envisaged included abolishing the ‘no fault eviction’ (s21 notices), establishing a new annual rent increase process, a new independent ombudsman (to provide ‘fair, impartial, and binding resolutions’) and to strengthen grounds for possession for anti-social behaviour or a consistent build-up of rent arrears, as well as the right to keep a pet. The Bill was introduced to parliament on 17 May 2023 with the second reading on 23 October 2023, when it was announced that that the ‘no fault eviction’ was to be delayed indefinitely pending reform of the court system, which Michael Gove said was ‘vital,’ notwithstanding his desire to bring the Bill into effect at the earliest opportunity. Gove remains of the opinion that a healthy private rental sector is in the interest of all, with tenants being given the ‘rights that they deserve’ and landlords being given a mechanism to obtain possession quickly for arrears and anti-social behaviour.
Gove considers that these essential reforms cannot be properly implemented without a reform of the court system which, particularly in the post-Covid world, is overwhelmed and unable to deal with the existing workloads. Understandably, the current backlog causes concern for landlords who face many months’ delay before obtaining possession and/or judgment against a tenant in arrears (with no prospect of paying) or who is causing a nuisance, disrepair, or damage. The concern is that, without these reforms, the court system will be placed under increasing pressure which could negate the objectives of the Bill and cause greater concern for landlords.
Bearing in mind that many tenancy disputes do not necessarily need the input of the court, there is a need for a court system to be as effective as possible to deal with those cases that do require judicial determination. The proposals to the court system include digitising the court process, exploring how disputes involving anti-social behaviour can be prioritised, improving bailiff recruitment, and providing greater guidance to landlords and tenants.
The Bill will also change the grounds for possession under section 8 of the Housing Act, which are designed to be “comprehensive, fair, and efficient, striking a balance between protecting tenants’ security and landlords’ right to manage their property”. The changes will require landlords to provide tenants with a reason for terminating the tenancy (unlike the no fault basis) and will be extended to include redevelopment, wanting to sell the property, or allowing a close family member to move into the property. The grounds for anti-social behaviour will be strengthened and it is hoped that the changes to the court system will see a more efficient mechanism in place, ensuring that those matters which are urgent are dealt with promptly and quickly and with the ombudsman being used for non-urgent matters.
It is fair to say that many landlords are concerned by the changes proposed by the Bill, not least because they are perceived to be heavily in favour of tenants. Market research suggested that many landlords considered that the abolition of s21 notice would have a negative impact on the rental sector, presumably because of the limitations of the grounds under s8 and the current pressures on the court system, which many are concerned will become greater with the abolition of s21 notices. At present, many landlords consider the s21 notice process (in particular the on-paper accelerated procedure) to be the only means of an effective and efficient route for possession, notwithstanding the current delays. Once enacted, the Bill will require landlords to justify the reasons for termination, requiring them to rely on the newly extended grounds for possession. The obvious question for many is how easy and quickly it will be to get possession under the new changes which are, as stated, perceived to be tenant friendly.
The short answer is that we simply do not know, and it will depend on the reforms proposed to the court system, the success of the ombudsman as an alternative to litigation, and whether the assurances made by the government will soften the position of landlords on the scrapping of s21 notices.