Section 21 Is Dead. Long Live Section 8!

The future of the UK rental market is emerging. The government wants views on its plans for removing the assured shorthold tenancy (AST) regime and bolstering the court process for gaining possession of a property. Will it be enough to fill the vacuum left by the AST regime?

Background

In April, we blogged about the government's plans to abolish section 21 of the Housing Act 1988 which, the government said, left tenants vulnerable to indiscriminate and arbitrary eviction. Under section 21, landlords can terminate a tenancy on two months' notice following the initial fixed term of not less than six months, without an underlying reason. The government also assured landlords that it was mindful of their need to legitimately and swiftly end tenancies to reclaim their property under the section 8 process.

This consultation, published on 21 July and lasting 12 weeks until 12 October, will help put the flesh on the bones of what James Brokenshire, former Communities Secretary, described as “a generational change to the law that governs much of the rental sector”. While the government has set out its broad principles and objectives, there are unanswered questions on the scope and nature of the changes. This consultation will inform the detail of what comes next and how the government will balance the interests of tenants and landlords, which it says at the moment is “not as fair as it should be”.

Specifically, the government is still pondering a number of issues including:

Should it go further and introduce a minimum length for fixed term tenancies? How can it beef up the section 8 process? The fixed term tenancy: an endangered species?

Abolishing section 21 does not mean the end of fixed term tenancies. Parties can specifically agree a tenancy agreement for a fixed length of time or for a period that continuously rolls over. Contractually agreed break clauses are a common feature of fixed term ASTs and give both parties the ability to exit the tenancy at given points during the agreement. How will these break options operate in the post section 21 regime?

A tenant will (as currently) be able to end a fixed term tenancy after the end of the fixed term or at an agreed break point but a landlord will only be able to end the tenancy (fixed term or periodic) by issuing a section 8 notice and demonstrating one of the statutory grounds for seeking possession. It could operate a break clause but, if the tenant refuses to leave, the landlord will have to...