Year: 2020

A Liberal Democrat Baroness says she is to make a last-ditch bid in the House of Lords tomorrow to stop evictions going ahead following the end of the ban.

Lib Dem Olly Grender will use a procedural motion known as a Prayer To Annul in the Lords to try to block evictions.

This little-known and little-used procedure could force a vote on the government’s wider Coronavirus measures.

Baroness Grender hopes such a move will galvanise opposition to evictions: a Labour peer, justice spokesperson Lord Ponsonby of Shulbredeh, has himself tabled a so-called Regret Motion against the end of the ban.

Baroness Grender has told the Mirror newspaper: “This government made a promise that no renter who has lost income due to COVID would lose their home, yet … tens of thousands are facing that very real threat.

“Rather than scrapping no-fault evictions as promised in the election, Tory ministers are enabling evictions of an estimated 55,000 private renters.

“People who have been furloughed, made redundant, have children going to a local school are all under threat. If this goes ahead countless families will find themselves without a home, on this government’s watch, in the midst of a pandemic.”

The Grender measure, if approved, will effectively force the government’s hand on the Renters’ Rights Bill, which already pledges to abolish S21 notices, reform the repossession process, create a ‘lifetime rental deposit’ and widen access to the so-called rogue landlords and rogue agents database.

However housing minister Christopher Pincher recently indicated that it may well be 2021 before the Bill is introduced into the House of Commons for debate; the Grender measure, if successful, will escalate that process.

In response the government says: “We’ve taken unprecedented action to support renters by banning evictions for six months, preventing people getting into financial hardship and helping businesses to pay salaries.

“To help keep people in their homes over the winter months, we’ve changed the law to increase notice periods to six months and introduced a ‘winter truce’ on the enforcement of evictions for the first time.

“In addition, we have put in place a welfare safety net of nearly £9.3 billion and increased Local Housing Allowance rates to cover the lowest 30 per cent of market rents.”

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Reduce buy to let regulation or face a worsening housing crisis – that’s the message from a leading property lawyer.

Mary Rouse, from Midlands law firm Wright Hassall, says unless some temporary legislation is revoked – especially the eviction ban – thousands of buy to let landlords will themselves  face possession action by their lenders.

She says many landlords – some of whom manage properties as businesses – are under increasing pressure from lenders to start repayments on buy to let mortgages despite possibly receiving no rental income.

Rouse says the inevitable consequence of this is that families will be made homeless and there will be fewer properties to let, with landlords either losing their properties to lenders or selling up.

“We need legislation that treats both landlords and tenants fairly and, at the moment, this simply is not the case” says Rouse.

“For landlords, the risk of losing their properties to lenders – who cannot keep extending payment holidays – looms, while the uncertainty for a lot of tenants is reaching breaking point, so something has to give.

“For me, the way forward is a very clear amendment which enables landlords to progress cases where a tenancy breach is non-Covid related, for instance antisocial behaviour, domestic violence, or where substantial arrears had accrued before Covid began.

“Equally, money must be found to cover the full rent for tenants who find themselves in difficulty as a direct consequence of Covid until they return to employment.

“Only then will we start to see some stability in the rental market – security for tenants and income for landlords. Without swift intervention on both fronts, we will be faced with an increase in people being made homeless and fewer private rental properties, all of which will place an impossible burden on the already creaking social housing sector.”

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ARLA and the NRLA have teamed up with charities – some usually critical of letting agents and landlords – to lobby the government for help for renters

A statement from ARLA Propertymark says the organisations are united in believing that maintaining ‘solvent’ tenancies is the best way to support both the rental sector and the economy as a whole.

So the organisations – including Shelter, Citizens Advice, Generation Rent and Crisis – want a short-term package of emergency grants and loans worth £270 million to help renters who have lost out on income or been furloughed as a result of the pandemic.

The emergency fund would be limited to helping tenants pay off any unexpected rent arrears built up since the start of the lockdown.

Despite recent government increases in housing benefit rates to cover the bottom third of private rents, thousands are still falling through the gaps in the welfare safety net.

The coalition argues the fund would help both tenants to keep their homes and landlords who rely on rental income for their livelihoods.

In a letter to Chancellor Rishi Sunak the coalition of bodies suggests:

– rIng-fenced funding administered through local authorities, using a mechanism like the Discretionary Housing Payment;

– an additional cash injection into local welfare assistance schemes;

– government backed, interest-free loans for tenants not eligible for the above support.

Specifically, the proposal outlines ringfenced funding with a limited timeframe, to avoid the unintended consequences of discouraging tenants from making payments where they are able to do so.

Tenants could also claim for a lump sum to be paid directly to the landlord.

Here’s the letter to Sunak in full:

Dear Chancellor,

As organisations representing the interests of tenants, landlords and letting agents we write to call for a financial package to support tenants in private rented housing struggling with rent arrears as a result of the COVID-19 pandemic.

Whilst we have each had differences of opinion about the framework and rules required for courts to begin to hear possession cases again, we are united in wanting to sustain tenancies wherever possible.

To support this it is vital that urgent action is taken to address the arrears of those who have built them through no fault of their own. This would greatly assist not just tenants but also those landlords who especially rely on rental income for their livelihoods. It would also reduce the risk of homelessness as a result of rent arrears.

Government action like the furlough scheme and the increase in Local Housing Allowance has supported many tenants to continue their rent payments, however it remains the case that there are many instances where support is still insufficient. With the courts reopening on 24th August for possession hearings for the first time since the crisis began, further measures are needed to help sustain tenancies.

The spending review in the autumn provides an important opportunity to ensure that going forward the benefits system provides claimants with the security they need so that rents can be paid. In the interim however, a short term financial package is desperately needed to cover rent arrears built up as result of the pandemic.

1. Longer term support through the benefits system is essential, and we continue to call for reforms to Local Housing Allowance, Universal Credit and the benefit cap.

2. However, the nature of the coronavirus crisis requires a one-off intervention to address specifically Covid-related arrears. This will enable both tenants and landlords to continue the tenancy and support tenants to remain in their homes.

We propose the development of a specific fund to address COVID-related arrears.

This fund should support tenants to pay-off arrears that have been built up since the start of the pandemic in March. We propose a range of mechanisms through which tenants should be able to access support:

• For those tenants in receipt of benefits, or who would otherwise be eligible for benefits but have no recourse to public funds, support should take the form of a dedicated grant. This could be administered by local authorities, using a mechanism like the Discretionary Housing Payment, but it must be designed so that it gets to those that need emergency funding now to pay off their arrears.

• Further funds could be made available through an additional cash injection into local welfare assistance schemes, building on the £63 million the Government committed in June 2020.

• For other tenants, such as those who have been furloughed and are struggling to pay their rent now but will be able to pay in the future, support should take the form of a Government-backed, interest-free loan. This could be administered by a third party such as a credit union or a bank or building society.

Further details of our proposals, and how we envisage them operating can be found enclosed and we strongly urge the Government to respond positively, and swiftly, to them.

We would welcome the opportunity for a roundtable discussion with your department to examine our proposals further.

We look forward to hearing from you.

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Agents and landlords must now give tenants six months’ notice before they can evict, except in the most serious of cases, such as incidents of anti-social behaviour and domestic abuse.

On Friday the government made the announcement – just a few hours ahead of the start of the Bank Holiday weekend – and the new rules came into effect the next day, Saturday.

So from now until March next year landlords and agents must provide at least six months’ notice period prior to seeking possession through the courts in most cases, including  section 21 evictions and rent arrears under six months.

Notices served on and before August 28 are not affected by these changes, and must be at least three months.

Exceptions apply for the worst cases to seek possession; these are:

– anti-social behaviour (now 4 weeks’ notice);

– domestic abuse (now 2 to 4 weeks’ notice;

– false statement (now 2 to 4 weeks’ notice);

– over six months’ accumulated rent arrears (now 4 weeks’ notice);

– breach of immigration rules ‘Right to Rent’ (now three months’ notice).

In addition, new court rules have been agreed, which will come into force on September 20 meaning landlords will need to set out in their claim any relevant information about a tenant’s circumstances, including information on the effect of the COVID-19 pandemic.

Where this information is not provided, judges will have the ability to adjourn proceedings.

“We have developed a package of support for renters to ensure they continue to be protected over winter. I have changed the law so that renters are protected by a six month notice period until March 2021” says Housing Secretary Robert Jenrick.

“No tenant will have been legally evicted for six months at the height of the pandemic as the stay on possession proceedings has been extended until September 20.

“For the most egregious cases, for example those involving anti-social behaviour or domestic abuse perpetrators, notice periods have returned to their normal level, and landlords will be able to progress serious rent arrears cases more quickly.

“These changes will support landlords to progress the priority cases while keeping the public safe over winter. We will keep these measures under review and decisions will continue to be guided by the latest public health advice.”

Jenrick adds that from September 20 when the eviction ban lapses “courts will carefully prioritise the most egregious cases, including anti-social behaviour, fraud, and domestic abuse, ensuring landlords are able to progress the most serious cases, such as those involving anti-social behaviour and other crimes.”

It remains the case that if a landlord made a claim to the court before August 3 they must notify the court and their tenant that they still intend to seek repossession before the case will proceed, including in section 21 cases.

“More detailed guidance on using the courts and the new arrangements will be made available in advance of possession proceedings starting again” according to the Ministry of Housing, Communities and Local Government.

“We are conscious of the pressure on landlords during this difficult time and do not want to exacerbate this.  Of course, it is important that tenants who are able to do so must continue to pay their rent.”

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ARLA Propertymark says the number of new prospective tenants continued to rise in July, hitting the highest number on record.

The average letting agent branch registered 97 new tenants, compared to 79 on average in June. This breaks the previous record of 88 in January of this year.

The number of rental properties available in July also continued to rise, with the number of properties reaching an all-time high for the month with an average of 208 managed per letting agent branch.

This is an increase from 200 in June and tops the previous record of 192 in July 2017.

The average tenancy length was also at an all-time high in July with tenants staying in their properties for 21 months.

Regionally, this figure was highest in the South East with tenancies lasting 24 months.

“We have seen a record-breaking level of rental stock, and demand from tenants continues to grow, providing a positive outlook for the future of the private rented sector” says Phil Keddie, the ARLA president.

He continues: “For the market to fully recover from the COVID-19 pandemic, it is vital that landlords have good communication with their tenants, and that they continue to keep paying their rents, especially in light of rule changes and announcements impacting notice periods and additional government financial support being offered to tenants and landlords.”

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A leading trade body has told Prime Minister Boris Johnson that some landlords face receiving no rent for two years.

In a letter to Johnson, the National Residential Landlords Association accuses the government of expecting landlords to subsidise struggling renters and reward those who are wilfully refusing to pay their rent.

It is also accused of causing continuing hardship to communities and families suffering anti-social behaviour and domestic violence perpetrated by tenants.

This letter follows the last minute eviction ban U-turn last week.

The government has now said that repossession cases on the grounds of rent arrears will not be treated as a priority until tenants have built over a year’s worth of rent debts; in addition landlords now have to give six months notice of possession.

Where the case is disputed, even before the pandemic, courts were taking an average of nearly six months to deal with cases, with the backlog this is now likely to be longer.

Taking the English Housing Survey average weekly rent in the private sector of £200, the NRLA says this means a potential lost income for a landlord of up to two years amounting to £20,800.

The letter to Johnson says 94 per cent of private landlords are individuals, letting out just one or two properties.

The NRLA is warning that the failure to provide any direct financial support for the sector during the pandemic means many landlords will be forced to make claims against renters building arrears.

“This would leave tenants’ credit scores in tatters” says the association.

The NRLA argues that the only route out is for interest free, government guaranteed hardship loans to be made available to tenants to pay-off COVID related arrears. These have been introduced in Wales and will sustain tenancies and remove any risk of eviction as furlough is removed, the association says.

These measures should be accompanied by a guarantee that there will not be a further extension of the ban on repossessions.

Ben Beadle, NRLA chief executive says: “The overwhelming majority of landlords have been working constructively with their tenants to sustain tenancies where rent arrears have built as a direct result of the pandemic.

“The government actions are a kick in the teeth for all these landlords who have done the right thing.

“Ministers must use the next four weeks to come up with a credible plan that pays off rent arrears built due to the pandemic and gets the courts hearing cases again.

“Stopping landlords from legally ending failed and disruptive tenancies is not a solution. The Government must act to cover the costs of providing homes, they cannot expect landlords to foot the bill for their failure to support households.”

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Ahead of the evictions ban being lifted on Sunday, ARLA Propertymark has written to Housing Minister Robert Jenrick, setting out a range of points on behalf of letting agents.

The letter, penned by ARLA’s policy and campaigns manager Timothy Douglas, urges the government to stick to its timetable for courts reopening to hear evictions cases from September 21.

It is vital that courts hear cases as soon as possible so that those who choose not to pay or are guilty of unacceptable behaviour face justice, reads the letter.

The trade body, which represents almost 10,000 agents across the UK, says tenant arrears built up prior to the Covid-19 pandemic are unrelated and should be treated as a separate matter.

It argues that last-minute announcements delaying the courts from reopening and extending notice periods have had serious implications for agencies which manage multiple tenancies.

Throughout the pandemic, ARLA Propertymark has encouraged its members to work with landlords and tenants to be flexible and do all they can to avoid tenants being evicted because of the pandemic.

Last week, the government revealed it was introducing a commitment not to have evictions over Christmas and no enforcement action in areas under local lockdown.

Notice periods have also been increased to six months, with the aim of preventing tenants being evicted over winter. There will be exceptions with shorter notices for the most ‘egregious’ cases of anti-social behaviour, domestic abuse or fraud.

The letter, which you can read in full here, goes on to argue that when the ban on evictions was announced in March, thousands of cases which were not related to Covid-19 became stuck in the court system.

“For example, there is a case in North London of a woman who incurred £22,000 in rent arrears prior to Covid-19 and was due to appear in court w/c 30 March 2020 just as evictions were banned,” reads the letter.

“This meant that she no longer had to face court and now owes arrears close to £30,000, which has caused the landlord extreme financial hardship.”

Douglas says it is vital that cases such as these are prioritised when courts reopen on Monday.

The letter also raises concern that the government does not have a plan in place to deal with a huge backlog of eviction cases. It says the plan for ten new ‘Nightingale Courts’ to deal with extra cases is not enough to manage an estimated 62,000 possession claims.

ARLA Propertymark calculates that any landlord who issued a claim on the day the evictions ban started has on average lost a total of £8,549, equivalent to a nationwide total of £530 million.

“Every week a landlord must wait to regain possession of their property is a week of lost income, particularly affecting private landlords and agents who may be relying on rental income to pay their own mortgages and bills,” says the letter.

The letter concludes by saying that if plans in the Renters’ Reform Bill to remove Section 21 from the Housing Act are enacted, Section 8 must be reformed, and a new specialist housing tribunal created.

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The National Residential Landlords Association (NRLA) has slammed London Mayor Sadiq Khan’s call for a rent freeze in the capital.

Yesterday, ahead of the eviction ban being lifted from Monday, Khan called on the government to freeze rents in London to prevent evictions caused by Covid-19.

The NRLA says rent controls in the capital would be ‘a disaster for tenants’. Khan is requesting that new powers are introduced to prevent rent increases for two years.

“A rent freeze is only one part of a package of measures renters urgently need from government to ensure no one is forced out onto the streets as a result of this pandemic,” said the Mayor.

“The end of the furlough scheme means even more renters in the capital are now at risk of pay cuts or losing their job.”

“Yet at every stage of this pandemic, renters have been treated as an afterthought by the government, with protection measures only ever rushed out at the last minute,” the Labour Mayor added.

He drew comparisons to Berlin where rents have been frozen for five years, saying that London should be able to freeze rents for two years in ‘extraordinary times’.

In response, the NRLA has drawn attention to a 2010 report from the last Labour government, of which Khan was a member, which stated that historic rent controls had been a major factor in the ‘decay of much of the inner city housing stock’.

The association says the proposals for a rent freeze also ‘fly in the face’ of warnings from the Centre for Cities that rent controls would ‘close off London to new residents’.

“As history and experience elsewhere tells us, all [rent controls] would do is drive landlords out of the market exacerbating an already serious shortage of homes available,” says Chris Norris, NRLA policy director.

“Rather than driving a wedge between landlords and tenants the Mayor should focus on using the powers he already has to boost the supply of available housing, including for private rent.”

Norris says that the NRLA does, however, support the Mayor’s call for greater financial support for tenants struggling with rent arrears.

“In the end this would help them, and the majority of landlords who are individuals and not property tycoons, to sustain tenancies.”

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Student renters want break clauses automatically included in tenancy agreements to protect them financially in the event of a second wave of Coronavirus.

That’s the result of a new survey conducted by websites Money Magpie and Save The Student.

The break clause would lapse the rental contract, meaning students required to return home if their university was to close would not be liable for any remaining rent under the tenancy agreement, and landlords would be able to re-let the property – if they could.

Before the summer there was a spate of claims made that tenants were being charged for accommodation they left vacant after returning home when universities and colleges closed as part of the UK lockdown.

Commenting on the findings a paralegal at Nelsons law practice – Paula Haverkamp – says: “If the [AST] contract contains a break clause and notice is served in accordance with one, the student’s obligation to pay for the full term of the tenancy will fall away. In other words, this will allow for early termination of the tenancy.

“Usually a break clause will not take effect unless the student has been in occupation for a minimum of six months. However, this may differ from contract to contract. A student can ask for a break clause to be inserted and caveat it in relation to a second wave of Covid-19, but a landlord does not have to agree.

“If a student is in university-owned accommodation, they will need to seek advice from their university in relation to a second wave. However, for students who rent privately as set out above, any agreement entered into is a binding contract. Students will need to negotiate with the landlord if they wished to end the contract early.”

She adds that if a student vacates early and refuses to pay rent due to Covid-19, a landlord is entitled to bring a claim for non-payment of rent.

“When renting to students, most landlords will insist there is a guarantor. If this is the case and the student does not pay the rent, the guarantor will also be liable for the rent. If the landlord issues court proceedings and obtains a judgment for the arrears, and the judgment is not satisfied within 30 days, the student and their guarantor will have a county court judgment against them.”

Haverkemp says that some tenancy agreements contain a ‘force majeure’ clause, which dictates what will happen in the event that either party cannot perform their obligations under the contract due to circumstances out of their control. While Covid-19 may be a force majeure event, it is unlikely to stop a tenancy from continuing, she believes.

“If tenants are unable to pay their rent due to Covid-19 disruption, they need to speak with the landlord immediately. If they are working and are on a reduced wage, they will need to evidence this to the landlord, who may agree to a reduction in the rent. Tenants will need to remember that if a reduction is agreed, the shortfall will need to be made up for the remaining months.

“It is worth noting that the government has not introduced specific financial help in relation to Covid-19. Any students who are struggling to pay their rent must contact the university, halls of residence manager, private landlord or letting agent to discuss the matter with them, and to try to reach an agreement.”

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The latest survey of buy to let landlords suggests a relatively healthy private rental sector notwithstanding the challenges of the Coronavirus and the evictions ban.

The survey – by Vesta and Property Tribes – was conducted amongst 157 landlords between June 23 and August 21 and showed that 35 per cent received a request from a tenant for a rent reduction or payment holiday because of Covid-19.

Just over three quarters of landlords had collected more than 90 per cent of rent due to them between March to June 2020; only three per cent of landlords collected less than half of rent due.

However, a third of landlords are suffering tenants with arrears – a higher figure than reported in most similar surveys in recent months.

Despite the difficult circumstances, 66 per cent of landlords believed their rents would increase or at least stay the same over the next 12 months.

In terms of tenancy occupation, some four fifths of landlords said 90 per cent or more of their rental properties were currently fully tenanted. This compares with typical void periods in the UK prior to the pandemic of around three weeks per year, equivalent to an occupancy rate of approximately 95 per cent.

Russell Gould, Vesta’s chief executive, comments: “There is a lot of negative press and headlines about a very small minority of rogue landlords that do not treat their tenants fairly and with empathy.

“The results of this survey and the actions taken demonstrate that the vast majority of landlords have worked with, empathised with and have supported their tenants during the pandemic. Many landlords are retired and rely on rent as their major source of income so many have taken a significant financial hit to help their tenants impacted by COVID-19.”

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