A Thatcher-era reform introduced to encourage the then-moribund private rental market is to be reversed under proposals announced by the prime minister today. In a much-trailed announcement, the Ministry of Housing, Communities and Local Government said today that Section 21 of the Housing Act 1988, which allows what it calls 'no fault' evictions, will be repealed. The government also promised to strengthen the possession process under Section 8 of the act, to allow owners to regain their home should they wish to sell it or move into it.
The announcements follow an eight-week consultation last year into the barriers to longer tenancies in the private rented sector. In a response published today, the ministry emphasises the current importance of private rentals, which now account for 19% of all households in England. Before the 1988 reforms, introduced by Margaret Thatcher's environment secretary Nicholas Ridley, the figure was lower than 8%.
Under Section 21, landlords may evict tenants on fixed-term contracts with as little as two months notice. This leaves tenants feeling insecure and unable to plan for the future or call where they live a home, the announcement states. However the consultation found little support for a three-year mandatory minimum tenancy proposed under the consultation. 'Tenants favoured different lengths of tenancy depending on their circumstances and landlords preferred the status quo,' the response states.
Rather, today's plans will create 'flexible, open ended tenancies and deliver a more robust system' which works for both landlords and tenants, the response states. Part of the package is the HMCTS courts reform programme. Digitising the court process will make it 'easier and simpler to use'.
However the document avoids setting any timetable for reform. Describing the removal of no-fault evictions as a 'significant step', the document states that today's announcement is 'the start of a longer process'. This will involve building a consensus 'to improve security for tenants while providing landlords with the confidence that they have the tools they need'.
Meanwhile the government is still considering creating a specialist housing court following a consultation which closed in January. 'We will consider the responses alongside developing a package of legislative reforms,' today's announcement states.
Joanne Young, legal director in the property litigation team at national firm Ashfords, said that the proposals could drive private landlords out of the market. 'No one can argue that there are some very poor practices by some private landlords. But this ignores the excellent private landlords who are providing great quality housing for tenants. Those landlords, landlords I see on a day to day basis, do not use section 21 without good reason; it is used simply because it provides a means of obtaining possession that does not result in long court proceedings.
'Unless there are real improvements in the court process, I fear these proposals may be the final straw for many private landlords.'
Law Society president Christina Blacklaws described the reform plans as a step in the right direction. 'Section 21 has become one of the leading causes of family homelessness in the UK. Any new measures must balance the rights of landlords to their property with tenants’ rights to adequate protections. However, housing advice is already limited, and even when people are facing repossession, or disrepair presents major health risks, they may not be able to get the legal advice they need to properly enforce their rights,' she said.
'The courts exist to serve both landlords and tenants to effectively settle possession claims. The system must be provided with the appropriate resource if it is to maintain their confidence to do so.'