Tenancy shake-up plans confirmed

From Robert Ulph on August 20, 2021

In May this year, as part of the Queen’s Speech, when the government set out their plans for the next parliamentary session, there were four key elements on the housing sector. These were significant changes to planning rules, a new Building Safety Regulator, leasehold changes which affect ground rents, and the next steps for Renters Reform.

The developments for reform in the private rented sector (PRS) include the government’s consultation response on reforming tenancy law to abolish Section 21, along with their proposals on the ‘lifetime’ tenancy deposit scheme. A White Paper detailing the whole reform package will be published in the Autumn with legislation following shortly after.

At the time of the speech Timothy Douglas, Propertymark Policy and Campaigns Manager commented: “Propertymark will be engaging with MHCLG and MPs to ensure they fully understand the consequences of any changes. We will also be scrutinising the White Paper and proposed legislation, to ensure the best possible outcome for our members.”

More recently we have heard confirmation from the government on what the plans mean for a shake-up with assured shorthold tenancies, when Housing Minister Lord Greenhalgh said the government was committed to delivering a package of reforms.

“A key part of our future PRS reforms is to ensure the flexibility of private rental tenancies is retained, whilst balancing increased security for those tenants who need and want it, alongside driving an improvement in the quality and standards of PRS accommodation,” Lord Greenhalgh commented.

In the consultation document – A New Deal for Renting – the government said landlords who evict tenants for rent arrears or anti-social behaviour using ‘no fault’ grounds masked valid reasons for eviction, which fuelled a culture of mistrust and uncertainty.

“The ability to use section 21 rests in the assured shorthold tenancies regime. The government is of the view that, with section 21 removed, the assured shorthold regime no longer serves a practical purpose as the ability to create fixed-term tenancies already exists in the Housing Act 1988.”

With section 21 removed, all future tenancies would be assured, either as fixed-term assured tenancies or contractual periodic assured tenancies. It would mean the default position will be that a tenancy is a periodic assured tenancy unless the landlord and tenant have agreed a fixed term in writing. A tenant under an assured tenancy won’t be evicted unless the landlord can provide grounds under Schedule 2 of the Housing Act 1988 or at a break point in the tenancy contract where a break clause has been agreed between them.

We will await the publication of the White Paper due in the Autumn to see the details of the whole reform package to see what new legislation the sector could be facing. I will keep you updated but if you would like more information or to discuss any other matters on the local property market, please do not hesitate to contact me.