Landlords: how to prepare for the abolition of Section 21

According to BBC research, over the past three years, more than 227,000 people renting privately in England have been served notice for a ‘no-fault’ eviction.

That startling statistic is one of the drivers behind the Renters’ Reform Bill, which is expected to be voted into law no later than May 2023. The main aim of the proposed legislation is to protect tenants from rogue landlords. But what do the changes mean for the majority of law-abiding landlords?

What are the proposed changes?

Section 21 currently allows a landlord to evict a tenant without an explanation legally. Under the new Bill, landlords will only be able to serve an eviction notice if they can provide a valid reason to do so. For example, the tenant might be in breach of contract, or the landlord might need to sell their rental property.

How will that affect landlords?

The proposed changes are aimed at a relatively small group of offenders in the rental market, but many landlords could find they need to up their game when the Bill becomes law.

There will be three important considerations for landlords when the Bill is finally passed:

• One of the reasons for the new legislation is to empower tenants to challenge “unjustified rent increases.” This could put pressure on landlords wishing to increase their rental charges. In order to justify a rent rise, landlords will need to stay up to date with local lettings market pricing trends.
• The Landlord and Tenant Act 1985 includes “an absolute obligation upon landlords to carry out basic repairs.” The New Bill aims at “incentivising landlords to engage and resolve issues”. To avoid unofficial complaints turning into official disputes, some landlords may need to react more quickly when maintenance and repairs are required.
• As it becomes harder to evict potentially difficult tenants, landlords will need to pay more attention to the referencing process, making every effort at the application stage to ensure that future tenants will not cause problems. Alternative line: At Daniel Cobb we believe in marketing quality properties to tenants who are serious about renting. We want them to treat your home as if it was their own. Which is why we run a thorough referencing process, so that the need to use a section 21 doesn't arise in the first place.

Is it still worth becoming a landlord or staying on as one?

Buy-to-let is a unique type of investment: landlords enjoy a regular profit on the rents they charge while also benefiting from the growth of their capital assets. Prime Central London rents rose by 22.2% in the year to July 2022, and they will likely continue to rise due to the current shortage of rental stock.

There are good reasons to feel optimistic about staying on as a landlord or making your first investment in buy-to-let, but for peace of mind, getting the right professional advice will be essential.

At Daniel Cobb, we have been helping landlords with their rental properties since the 1990s: finding suitable tenants and keeping everything in good order with the help of our network of trusted tradespeople. We take great pride in our reputation as lettings specialists and would love to help you with your buy-to-let investment.

Why not get in touch with our friendly and super-efficient lettings team today?