Over the past few years, there have been substantial changes to the rental property market. Following the onset of the Covid-19 pandemic, a raft of new legislation was proposed to try to offer tenants more rights and stronger protections.
While many in the rental industry expected that these changes would be temporary, several significant revisions have now been permanently enacted into law, and more changes are expected.
A recent government white paper has proposed additional rights for tenants that are also expected to come to a vote and be enshrined into law within the next few months.
Taken altogether, this new legislation could transform how many landlords buy and manage their rental property portfolio, and it is important to understand how they might affect you, whether you are a tenant or a property owner, but especially if you are a landlord working in the buy-to-let space.
What are the biggest changes that will affect landlords?
One of the biggest changes to the law that could affect buy-to-let landlords will be the removal of no-fault evictions.
Under current rules, landlords can issue a Section 21 notice against a tenant in order to take back control of the property when their tenancy comes to its end.
These are different from Section 8 notices, which can be used to remove a tenant from the property when they have broken one or more of the conditions of their tenancy agreement.
With the removal of Section 21 notices, this will no longer be possible, which may seriously affect the freedom that landlords have to manage their properties.
In most cases, buy-to-let landlords purchase properties and use their rental income to pay off the mortgage. This means they will eventually own the property, and this is certainly still possible under the law.
However, if you want to evict tenants once the mortgage has been paid off – so that you can sell the property, for example, or move into it – the circumstances under which you can do so may now have changed.
What if landlords want to evict a tenant?
If Section 21 notices are outlawed, as it is expected that they will be, the only remaining option for a landlord to evict a tenant will be a Section 8 notice.
The primary difference between these two mechanisms is that to remove a tenant using a Section 8 notice, you will need to rely on at least one of 27 legal grounds for doing so.
It is usually best for landlords to rely on more than one ground for eviction to build the strongest possible case, as evictions will not always be granted.
They will also need to give tenants a suitable amount of notice, which is specified in the law and varies from two weeks to two months, depending on which grounds for eviction the landlord is relying on.
There are too many potential grounds for eviction to list here, but some of the most common include:
- The tenant owes at least two months’ worth of rent – although, if they can pay off part of their arrears the eviction may not be granted
- The tenant has repeatedly failed to pay rent on time
- The current occupant is an heir of the original tenant and is not listed on the agreement
- The tenant has caused damage to the property or furniture, or let them fall into neglect
- The tenant has breached the terms of their tenancy agreement
- The landlord previously lived in the property and wants to move back in as their main residence
- The landlord wants to sell, demolish or substantially redevelop the property
- The mortgage lender has repossessed the property
In cases where a tenant has met all the requirements of their tenancy agreement and has not committed any offences (or met any of the conditions to remove them using a Section 8 notice), it will be much more difficult to evict them under the new rules.
This is something that landlords should factor into their plans if they wish to buy-to-let a property, and it is always advised to speak to a solicitor with expertise in property matters to ensure plans are legally sound and feasible.
It is difficult to estimate exactly how the removal of Section 21 would change the overall property market for buy-to-let landlords or tenants.
If you are a landlord aiming to carry out a Section 21 eviction before they are outlawed, or you want to include additional provisions in your tenancy agreements that could result in evictions, speak to a lawyer to ensure that you can do so within the bounds of the law.
Lynne Swanson is legal executive at Percy Hughes & Roberts Solicitors
