The end of an era

Section 21 finally came to an end on the 31st of July. 

Tom Entwistle comments:

Last Friday, 31 July, a legal deadline passed in England that most of the population will never be aware of. It was the final date on which a landlord could use court proceedings under a Section 21 notice, one served before 1 May. 

After that date, there is no more transitional arrangement. No more legacy paperwork working its way through the court system. The no-fault eviction, the shorthold tenancy and the whole tenancy regime built around it are over. Not phasing out. It’s over for good.

I have been a landlord for the entire life of that regime, so I hope I can be forgiven for being nostalgic and marking the occasion with something more than a shrug.

Where I came in

I started letting property because of the Housing Act 1988. Before that Act, I watched my parents' and grandparents' generations try to make rental property work under the Rent Acts.

This was a regime of regulated rents and near-permanent security of tenure that, in practice, meant a landlord who let a property might never get it back. Because the rents were controlled at an uneconomic rate, it became impossible to charge anything close to their market value, while landlords waited in vain for a change in the law. Our legacy portfolio was eventually sold for a fraction of its true worth.

The legislation devalued their investments in real terms to a fraction of their previous worth, and it taught everyone who watched it happen the same lesson: don't let residential property to a sitting tenant you can never remove. The state took over and would not let the relationship end on commercial terms.

Personally, I would never have invested under that regime, and neither would most of the people reading this. Nobody did, in any numbers. That's why the rental market pre-1988 shrunk to a fraction of its former self, from housing something like 95 per cent of the population prior to 1915 to less than 10 per cent in 1988.

The great housing revival

The 1988 Housing Act, and the assured shorthold tenancy it created, changed the calculation entirely. A landlord could let a property with contractual certainty: a fixed term and, if it became necessary, a reliable route to possession at the end of it via Section 21. There was no need to attend a court hearing to prove fault or run a contested court case. 

That single change in the risk profile of residential letting is, in my view, the real origin of the modern private rented sector. Buy-to-let lending followed in the 1990s, but it was the AST that made the lending worth offering. 

What followed was the largest expansion of small-scale landlordism this country has ever seen — ordinary people, not institutions, supplying the bulk of Britain's rental housing because the law finally let them do so on terms that made commercial sense.

The steady turnaround

It didn't stay popular, though. It was never going to. "No-fault eviction" is a phrase almost perfectly designed to generate public sympathy for the tenant on the receiving end of it. And as more families started renting privately, and with the collapse of council housing, it became even more of a negative media noose around the landlord’s neck.

Over the past decade it brought exactly that. Governments of both colours felt the pressure to reform, including the Renters (Reform) Bill under the Conservatives and its successor, the Renters' Rights Act, which received Royal Assent in October 2025 under Labour. 

Tax policy moved in lockstep. The withdrawal of full mortgage interest relief from 2017 onwards had already quietly reshaped the economics of leveraged buy-to-let years before Section 21 was even touched. By the time the Renters' Rights Act came along, a great deal of manoeuvre for landlords had already gone.

To be honest, some of the backlash was justly earned because of rogue landlords. There were, and are, bad landlords, and Section 21 was sometimes used exactly as its critics said it was, to evict tenants who complained about poor conditions.

While responsible landlords, by far the majority, provided safe, secure, long-term accommodation for singles and for families. That’s providing they were good tenants, regardless of the safety net of Section 21. The rogues would take advantage.

What we've ended up with is a blanket removal of a tool that the great majority of landlords used sparingly and properly, alongside a wider compliance regime. Now, a whole plethora of regulations comes down on the small-scale landlord because of the actions of a few. 

A national landlord database, a new ombudsman, capped rent in advance, a ban on rental bidding, longer notice periods, anti-discrimination grounds, and now a possession system that runs only through Section 8, with grounds that increasingly have to be evidenced and defended, at great expense, in court. 

Many in the industry constantly argued that the existing regulations were sufficient to keep the rogue landlords in check, if only local councils would enforce them. Most of the councils claimed lack of resources, but surely this was a problem that was easy to resolve without recourse to entirely new regulations.

The RRA is a lot of new bureaucracy for the ordinary landlord to cope with. With just one or two properties, self-managed, mortgaged personally, and already taxed under Section 24, who can blame them for taking stock of their position? 

The buy-to-let market has transitioned from a fairly passive part-time investment, a store of increasing value and a long-term pension – while at the same time providing a valuable community service – to one where large-scale portfolio landlords are the only ones running a viable business.

What's the macro effect?

The numbers here are genuinely contested. On one side, industry forecasts put the scale of this year's landlord exodus at around 220,000 homes plus, leaving the private rented sector, with perhaps 65,000 of those exits attributable directly to the Renters' Rights Act. Cumulative figures for the sell-off since 2021 run over 850,000 properties.

On the other side of the story, the data on the rate of landlord sell-offs looks slightly different. According to industry reports, the proportion of homes coming to market that were previously rented fell sharply, year on year, into the first quarter of 2026.

If these reports are correct, it suggests the biggest phase of panic-selling may already be over. What's more, consistent across both arguments is what happens to a property once a landlord does sell. Outside of London, it is suggested that only around one in sixteen former rentals goes back onto the letting market. Most are being taken up by new owner-occupiers, not by other investors.

This last point matters more than the headline exit numbers. It would suggest that we are not simply watching supply vanish, but a lot of it is transferring to owner occupation. 

What remains is a private rented sector (PRS) that’s consolidating into larger, more professional hands. These may be pension funds, build-to-rent platforms and larger portfolio landlords with the scale to deal with risk and treat compliance as a routine overhead rather than a constant threat. 

The rental homes may not all disappear. But the character of who provides them is changing and not necessarily to one offering a better service to tenants. I don't think anyone campaigning for the end of Section 21 was campaigning for a rental sector owned by large scale landlords and institutions instead of neighbours.

Enter Andy Burnham

This is where the story stops being purely about the private rented sector. Andy Burnham, the man now running the country, has intimated that he has the answer to the supply question, and it isn't one to make it easier to be a small landlord again.

Andy Burnham became Prime Minister on 20 July, and his view on council housebuilding sits at the centre of what he's said he wants to do. He says he wants the "biggest programme of council house building since the Second World War," reportedly funded in part by redirecting the existing £39 billion Social and Affordable Homes Programme away from its current recipients and towards local authorities building at genuine social rent.

It's a big, clear, ideologically motivated answer to a large housing shortfall. I don't think it's totally mad. But I do think it deserves the same scrutiny I've just applied to the private rented sector.

The question I keep coming back to is this: would the country not get more homes, faster, and with less strain on the public purse by keeping the PRS attractive enough for the small-scale investor? To keep flowing their own capital into it, rather than by asking the state to build and manage it (most likely inefficiently and at great cost) as the replacement?

Public money versus private risk

There really is an efficiency argument here.

A private landlord puts his or her own capital at risk. They bear the void periods, the maintenance bills, the mortgage rate resets, and the tenant who doesn't pay rent. If they get any of it wrong, they lose their own money, not the taxpayer's. What’s more, they generally have a better record on responding to tenants’ repair requests.

That discipline tends to produce careful, cost-conscious management. Whatever the tabloids say about “millionaire” landlords, most are ordinary working people risking their own savings and borrowings.

 Council housebuilding, on the other hand, involves the well-worn history of planning delay, cost overruns, long delivery timelines and, dare I say it, local corruption. Not that councils are staffed by fools; they are educated individuals who are dealing with other people’s money, but they don’t have skin in the game. 

Besides, public sector capital projects operate under a different set of pressures and rarely move at the pace private capital can when the incentives are there. It’s unlikely you will see a new council house built within the remaining three years this government has yet to run.

According to recent reports from Housing England, the quango responsible for deploying billions of pounds in grants, loans and investments, it says that the supply of social affordable housing will decline further in 2026-2027. 

Burnham has pledged the biggest house-building programme since WW2, but government funds are short, and there are questions about the viability of these projects without private sector funding. Commercial developers will only build where it makes economic sense.

If the government manages to start a major council house building programme, there could be an offset against a reduced housing benefit bill, since social rents sit well below market levels. However, this will have its knock-on effect of reducing the market for those landlords who specialise in housing HB tenants.

There is no doubt there's a place for more council housing; it will remove a section of the community from the PRS that perhaps should not be there anyway, but it is a choice, and to be honest, it's the easier political choice, not necessarily the more efficient one. 

In my view, the same billions that will now flow through council housing departments could, with a different tenancy and tax settlement, have kept a comparable number of homes in private hands at no net cost to the public purse.

The pattern, not the policy

In my lifetime I've watched the UK’s housing policy in all its nations complete an entire cycle. I came in under a regime that killed my family's appetite to invest and watched a new one build the biggest expansion of small landlordism this country has ever seen. I am now watching that same regime dismantled in favour of a public alternative once again.

The real "end of an era" isn't Section 21 and the assured shorthold tenancy. It's the idea that the small private landlord was ever going to be treated as a permanent, trusted feature of English housing policy.

Tenants deserve better protection from those who game the system, that goes without saying. They also deserve a warm, safe and secure environment. But nobody should be surprised in ten, twenty or thirty years from now, when whichever government is in office at the time, we go through the whole cycle again. If by then someone rediscovers the argument for more private capital in housing, because the state – however well-intentioned – has never yet managed to build its way out of a housing shortage.

Farewell Section 21, we will miss you!