No-fault evictions spared until courts reformed

In a surprise turn, Downing Street has confirmed that the ban on no-fault evictions will be postponed further until essential judicial system reforms are completed.

This has sparked mixed reactions from various stakeholders in the real estate industry.

The Renters Reform Bill's second reading: A mixed reception

The Renters Reform Bill, designed to enhance the rights of tenants and leaseholders, received its second reading in the House of Commons on Monday 23 October.

There was speculation as to whether the second reading would occur before the King’s speech on 7^th November.

While the Bill ultimately passed its second reading, it encountered resistance from some Conservative backbenchers, who expressed concerns about the ban on Section 21 evictions in England.

Section 21 evictions enable landlords to evict tenants without stating a reason and was introduced by the Housing Act 1988, a legal route the Conservative Party pledged to end in its 2019 manifesto.

The delay and its rationale

The delay in implementing the Section 21 ban arises from the government's intention to overhaul the court system, a process which includes digitising court processes to expedite cases.

The government aims to create a more efficient and responsive court system, allowing landlords to swiftly address issues such as antisocial behaviour or rent arrears.

Michael Gove, the Secretary for Levelling Up, emphasized the importance of these court system reforms, stating that they should precede the Section 21 ban.

Michael Gove wrote a letter to Tory back-benchers saying:

[...] implementation of the new system will not take place until we judge sufficient progress has been made to improve the courts

Rising opposition: No-Fault eviction ban sparks Conservative Party divide

A potential rebellion over the ban on no-fault evictions has been brewing within the Conservative Party, with around one-fifth of Tory MPs being landlords, according to their register of interests.

Some critics argue that the ban could force landlords to leave the rental market, ultimately reducing supply and increasing rents.

Labour claims that since the initial announcement of the ban on no-fault evictions in April 2019, over 70,000 households have left their homes due to Section 21 notices.

They have voiced concerns about further delays and their impact on renters.

The response from the real estate industry and NRLA

The National Residential Landlords Association (NRLA) had urged the government to address court hold-ups in parallel with the Renters Reform Bill's progress.

NRLA Chief Executive Ben Beadle stressed the need for the bill to secure the confidence of responsible landlords, highlighting the possible repercussions on the rental market if it failed to do so.

Court system improvements are seen as crucial to ensure a smooth transition as Section 21 is phased out.

Delays in court processes would exacerbate issues for both landlords and tenants, especially concerning rent arrears and antisocial behaviour.

In summary, the delay in implementing the Section 21 ban underscores the importance of revamping the court system to provide a fair and efficient resolution process for both landlords and tenants.

While the postponement has raised concerns on the side of tenant groups, landlords may well welcome the government’s decision to delay the roll out of the Section 21 ban, in order to reform the court process.

Going through the courts to evict a tenant incurs significant costs, at its fundamentals the appointment of a solicitor is not cheap.

The fear of financial losses, through being unable to evict problem tenants, or unsustainable costs as a result of being forced through the courts to evict was a primary concern. Landlords will likely be hoping for a simplifying of the process, for it to be made quick and fair and for costs to be minimised.