Towards the end of 2018 we had about 20 consultations on different issues that had some impact on housing. This year the buds of another busy autumn are appearing already.
The consultation on banning section 21 notices has been launched. It runs from 21 July to the 12 October. Clearly there can be no more important consultation for agents to respond to. The full consultation can be found here.
Although the media has been full of the removal of the section 21, the consultation is bigger and is actually suggesting removing the whole of the assured shorthold tenancy regime. The net effect of not having the section 21 would be to give a tenancy with the same characteristics as the assured, so losing the AST should not be so serious is section 21 is already gone. See the last paragraph on page 8.
The simple effect of these changes will be to create tenancies that run indefinitely till ended by one party or the other. This has obvious issues about landlords wanting to get rid of tenants but it has a more subtle issue of potentially killing most renewals. They have become less attractive with the loss of the renewal fees but if you can get enough from the landlord it may still be worth doing. However, with these proposals, unless the tenant wants a renewal, you will not be able to do it. Previously tenants were effectively held to ransom to sign a new agreement with the threat of section 21 if they did not. Going forward, they will just stay till they want to renew or go.
They proposing fixed and periodic contracts from the outset, though at the end of the fixed term the landlord would not be able to seek possession except one of the Schedule 2 grounds in an amended Housing Act 1988. They ask if fixed term tenancies should be for a minimum length, however as the landlord cannot seek possession just because the fixed term ends it may be a bit academic.
Mindful of historical actions they are proposing controlling rents to prevent landlords increasing rents as a method of evicting the tenant. This could be a rent increase that takes the letting out of the Housing Act or by making the rent unaffordable. Court cases on this point have already outlawed it so it may be an unnecessary concern.
Obviously any ban on section 21 has knock on consequences for all those offences where not being able to serve a section 21 notice is the penalty. The solution is not clear but they are aware of the issue.
To counterbalance the bad news the consultation includes some positive proposals> for example it suggests that the rent arrears ground 8 might be change to 2 months of arrears at the notice service and one month at the court date. This would be a small positive step in the right direction. They also suggest that a larger number of cases might be suitable for APP and ask consultees for their views on which grounds might be suitable.
Also proposed are some new grounds for possession including the landlord or a family member wanting to use the property or the landlord wishing to sell.
Though they suggest the landlord should be able to seek possession against one partner for domestic abuse, this is probably an area where it is appropriate for agents to venture as to seek possession against one would be to side with the other, often with little evidence. if just the abuser was evicted, in many case the victim tenant may not be able to pay the rent alone anyway.
Encouragingly they suggest ground 13 may be extended to include the tenant not allowing access for legal safety requirements. It is hard to see how this would be any different form the ground 12 breach of the tenancy, but it is good to have it recognised that this happens.
They recognise student are a special market but still feel the student should be allowed to remain till it suits them to leave. This rather ignores the next student who now has no accommodation for next year. It will be interesting to see how they resolve that clash of interests between two different tenant groups. it could be achieved by widening ground 4 to include the PRS.
Whilst we cannot say quite where the final outcome will be, especially with a new government, it is clear that we are likely to see big changes even if they take up to 24 months to come through.
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