The UK rental market is on the brink of significant change with the introduction of the Renters Reform Bill. One of the most notable shifts is the abolition of Assured Shorthold Tenancies (ASTs) in favour of periodic tenancies, meaning landlords can no longer set fixed terms for tenancies. This change is set to provide tenants with greater security while limiting landlords’ ability to regain possession of their properties without a valid legal reason.
This is a significant adjustment for landlords that will impact how they manage rental properties, select tenants, and handle evictions. Below, we break down the key changes and what they mean for property owners.
1. End of Fixed-Term Tenancies
Currently, most private rental agreements in the UK are Assured Shorthold Tenancies (ASTs), which typically run for a fixed term (often six or twelve months). Under the new system, these fixed terms will be phased out, and all rental agreements will default to periodic tenancies, meaning they continue indefinitely until the tenant decides to leave or the landlord provides a legally valid reason for eviction.
For tenants, this change offers increased flexibility and security. However, for landlords, it means they lose the ability to set a fixed end date for a tenancy, making it more difficult to plan for property sales, refurbishments, or changes in occupancy.
2. The End of “No-Fault” Evictions (Section 21 Notices)
One of the most talked-about aspects of the Renters Reform Bill is the abolition of Section 21 notices, also known as “no-fault” evictions. Currently, landlords can serve a Section 21 notice to reclaim their property at the end of a fixed-term tenancy without providing a specific reason.
Once this change takes effect:
• Landlords will no longer be able to evict tenants simply because they wish to regain possession of the property.
• Tenants will only be required to leave if the landlord can prove a valid legal reason for eviction.
This significant shift in power makes it harder for landlords to regain possession of their properties on short notice.
3. Stricter Eviction Grounds Under Section 8
With Section 21 being removed, landlords will have to rely on Section 8 of the Housing Act to evict tenants. However, Section 8 requires landlords to provide a valid legal reason for eviction, such as:
• Rent arrears – If a tenant is significantly behind on rent payments.
• Breach of tenancy agreement – For example, if a tenant causes damage to the property or engages in anti-social behaviour.
• Landlord selling the property – A new ground may be introduced to allow landlords to regain possession if they intend to sell.
• Landlord or their family moving in – If the landlord or an immediate family member needs to move into theproperty.
While the government has stated it will strengthen Section 8 to balance the removal of Section 21, many landlords are concerned that the eviction process will become longer and more complicated, increasing risks for property owners.
4. Increased Security for Tenants
The overarching goal of these reforms is to create greater stability for tenants. With the shift to periodic tenancies:
• Tenants will not face sudden eviction at the end of a fixed term.
• They will have more freedom to move out by giving proper notice rather than being locked into a fixed-term contract.
• They can only be evicted if the landlord can prove a legal reason under Section 8.
While this gives tenants more certainty, landlords have less flexibility when regaining control of their property.
What This Means for Landlords
These reforms are a significant shake-up for landlords in the private rental sector. Removing Section 21 means that regaining possession of a property could take longer and be more legally complex. This may lead some landlords to:
• Reassess their rental strategy – Landlords may need to vet tenants more carefully and ensure they have strong legal agreements in place.
• Factor in longer tenancy durations – Landlords need to plan for longer occupancy periods without fixed terms.
• Consider selling properties – Some landlords, particularly those who value flexibility, may decide to exit the rental market altogether.
Thinking of Selling? Auctions Offer a Fast & Secure Option
If you’re a landlord considering selling your property before these changes take effect, an auction could be the ideal solution.
Why Sell at Auction?
• Speed – Sell your property within weeks rather than waiting months for a traditional sale.
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With many landlords looking to restructure their portfolios in light of these changes, now is the time to act. If you’re considering selling your rental property, portfolio, or land, we have eager buyers waiting!
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Final Thoughts
The Renters Reform Bill marks one of the biggest changes in the private rental sector in decades. While it provides more security for tenants, it also reduces landlords’ flexibility, making it crucial for property owners to plan ahead.
Whether you decide to continue renting under the new rules or sell and move on, understanding these changes will help you make the right choice for your property investment strategy.
Thinking of selling? Get in touch today and find out how our auctions can help you secure a fast, hassle-free sale!
