Year: 2020

The Citizens Advice charity is calling for tenants with arrears directly created by the Coronavirus to be offered government grants to help them out of debt.

Dame Gillian Guy, chief executive of Citizens Advice, says this should be the principle goal of government in the four week breathing space created by the eviction ban U-turn announced on Friday.

“We’re really pleased the government has stepped in to keep its promise that no renter will lose their home because of the Coronavirus pandemic – for now at least” she says.

“During this extended pause on new eviction proceedings, we hope the government will work with Citizens Advice and others to put in place a series of protections which will help those who’ve built up rent arrears get back on their feet.

“We’d like to see funding for a dedicated set of protections, including measures such as grants for those in arrears due to Coronavirus.

“This would not only directly help those affected, but also contribute towards consumer confidence and the economic recovery.”

At the end of last month the charity claimed that its web page on ‘Dealing with rent arrears’ had seen its hit-rate increase four-fold year on year, and said the number of people seeking advice concerning possible homelessness had also risen.

Previous research by Citizens Advice claimed that over a third of private sector renters had seen their income fall by 20 per cent or more since March.

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Sean Hooker, Head of Redress at the PRS, looks at how the private rental sector got to today’s decision to extend the evictions ban.

The past six months have felt like a re-running of Dante’s Inferno, with each day or week seeing a deeper descent into the abyss.

This chaos will be with us for the foreseeable future and will be endlessly analysed and questioned for even longer, but nothing sums up the severity of this disaster than the situation we find ourselves in with the so-called evictions ban.

But the reality is evictions were never banned. Ministers enacted emergency powers to extend the notice period for possessions from two to three months and to suspend court hearings and close the courts so possession orders could not be issued.

The effect was not a prohibition but an almighty queue waiting for the doors to be open and for things to resume.

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Their decision to reopen the courts was only about restarting the process, not lifting a ban that was never in place.

The Government therefore has the power to extend the court suspension, which they have now decided to do until the 20th September.

What the Government has also done, under Schedule 29 of the Coronavirus Act is, under delegated powers to the Secretary of State, to extend the notice period to six months until at least the end of March.

They have also said courts will prioritise the most serious cases where there has been domestic violence or domestic abuse or in the most serious rental arrears cases.

In addition to the original decision to extend notices and close the courts, the Government directed the judiciary to introduce new practice directives and pre-action requirements for landlords to fulfil before a case pending a hearing could be reopened.

The requirements for a reactivation notice to instruct a court on what you want them to do and also for a landlord to demonstrate what the effect of COVID has had on their tenants, were brought into place. These remain and will still be needed after the courts reopen in a month.

Why the U-turn

Why have we come to this? And why at this late hour has the Government done yet another U Turn?

The answer is simple. Politics. You would have had to have been living in more than your social distancing bubble to have missed this.

There has been a steady stream of pronouncements from both sides of the renting divide about the impact of the pandemic on tenants, landlords, homelessness and the effect on the rental market.

Each side has used statistics and figures to justify their stance and these have been pored over, criticised and questioned.

As somebody who tries to piece together the true picture from evidence, this has been a constant frustration as the saying “damn lies and statistics” has never been truer.

What however resonates with politicians are “true life” stories and there have been plenty of those to fuel the emotive arguments from both sides.

Protagonists

The Government as far as England and Wales is concerned however, has stood on the side lines and let the protagonists go for each other’s throats.

This contrasts with the actions of their counterparts in the other parts of the UK who, whether you like it or not have taken more decisive action to try and deal with the root causes of the situation.

The political heat has however now ratchetted up and today’s announcement cannot be unrelated to the campaigning and press coverage that this issue has attracted this week.

It must be remembered however that this is not just about the high politics of this.

There are real people affected by this. Tenants and landlords still face huge uncertainty and this is just another short extension not a permanent solution.

The Government needs to understand the unseen consequences of this.

Despite the rhetoric of the media this is not or has ever been an Eviction Ban, arrears are not being waived, obligations still stand and a tenant who needs to get help from a local authority or free themselves from an ever increasing mountain of debt is trapped for yet another period of time.

Yes the courts will be encouraged to deal with the most serious cases first, but rent arrears will hang like the Sword of Damocles over both a tenant’s and landlords head.

Rescue package

Nowhere is there a rescue package, such as the loan system the Welsh have announced and the NRLA have been calling for, nor has a coherent strategy to deal with the long term homeless situation, the iceberg beneath the water of those who are now stuck under rooves they can’t afford with a landlord who cannot afford to maintain or some cases keep the property their tenants call home.

Both sides of the private rented sector in a seemingly endless purgatory.

This is neither opting for heaven or hell, this is Limbo, a nether region of uncertainty and despair which needs a bigger vision from not just Government but from us all.

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A council has won a planning appeal banning the use of a property for short lets – considered a landmark case which may lead to widespread curbs on Airbnb-style lettings.

In July 2019 Oxford council issued a planning enforcement notice against the owner of a property being used as a short let. This followed a complaint from a local resident that they were experiencing anti-social behaviour and nuisance from the property.

The owner appealed to the Planning Inspectorate, which has now dismissed the appeal and required the owner to stop using it as a short let from this month.

The council is calling for short let landlords to apply for planning change of use before it takes action against other properties in the city. It is also calling for effective government regulation of the sector.

There has been a rapid increase in the number of short let properties in Oxford since the rise of websites like Airbnb and HomeAway.

The council claims the use of such websites to rent out entire properties for most of or all of the year has resulted in a loss of valuable family homes. It adds that in extreme cases, short lets have been used for illegal or anti-social purposes.

On a search of just one website in February there were nearly 1,500 short lets available in Oxford.

Prior to this new ruling, landlords only had to apply for planning permission when there was a ‘material change’ in the use of a property. Where a home is being used for short lets, this can be a matter of judgement based on the facts of the case.

This means councils are not automatically notified when entire homes become used for short lets. They must rely on complaints from members of the public, lengthy investigations and individual assessments on whether there has been such a change. However, Oxford council claims it is difficult to do this when there is a stream of different people using a property.

In spite of these difficulties, the council issued a planning enforcement notice against the owner of a property in question, after complaints from a local resident.

The council subsequently concluded the property was in breach of planning law as there had been no application for a material change of use.

Attempts to resolve this were unsuccessful and the council issued an enforcement notice against unauthorised use of the property in July last year.

The owner of the property appealed the notice to the Planning Inspectorate.

The council’s evidence included screenshots of 100 reviews from two short-let websites. A planning inspector also undertook a site visit in June.

On the balance of probabilities, the inspector agreed that “a largely transient pattern and frequency of occupation” indicated that the property was a short let rather than a normal dwelling house.

The Planning Inspectorate dismissed the appeal and upheld the council’s enforcement notice. The property in question can now no longer be used as a short let.

This is the first time Oxford council has taken action against a short let landlord in this way, and it is thought to be one of the first examples in the country. It says it is now considering similar action against other landlords who are operating unauthorised short lets throughout the year.

“I am really pleased that the Planning Inspectorate has found in our favour. However, it is frustrating that it has taken more than a year to stop antisocial behaviour at a single short let property” says a council spokesman.

“There are hundreds of short let properties in Oxford and almost none of them have planning permission. This means we have no record of which properties are short lets or any way of taking quick action against landlords.

“Short lets in Oxford have resulted in a loss of valuable family homes. In some extreme cases, short lets have been used for regular loud parties and even as brothels. This case shows that we do take the issue seriously and we will chase landlords through the legal system if necessary.”

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A vocal London lettings agent says it isn’t the responsibility of agents or their landlord clients to take the financial hit for arrears caused by the pandemic.

The director of London agency Benham and Reeves, Marc von Grundherr, says: “There’s no doubt this is a terrible situation to be in. Unfortunately, it isn’t the responsibility of UK landlords to take this financial hit on behalf of their tenants and to expect them to continue to is somewhat unfair, considering they have already done so for some months.”

He says the five month eviction ban, ending this weekend, should have given tenants time to seek alternative living arrangements without the pressure of eviction. “In any other scenario, it’s unlikely they would have been afforded this luxury” he adds.

von Grundherr says it’s “incredibly unfair” not to consider the landlords’ plight as many are reliant on rental payments in order to survive “and have had no choice but to swallow this loss of income due to the eviction ban.”

While he concedes there will always be some unscrupulous landlords, most have been working on compromise payment arrangements where required.

“The reports that many [tenants] will now end up without a home are perhaps a tad exaggerated at the very least. In contrast, some landlords have been held to ransom by unsavoury tenants who have seen an opportunity to play the game knowing they can’t be evicted” he continues.

He says his agency has one tenant, in arrears, who has stated both to himself and his landlord client: “Go and speak to Boris, I don’t have to leave.”

von Grundherr says: “In this instance, the landlord is already £50,000 out of pocket and while the end of the eviction ban means he can now start proceedings, given the backlog, he is unlikely to even get a court date for three if not four months.

“Then if he gets an eviction date it is likely to take another three or four months to get the bailiffs in, so he may have to wait up to eight months to get his property back and by then he will be another £50,000 out of pocket.”

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Belvoir is backing a call for a loans scheme in England – similar to one in Wales – to protect tenants with arrears run up during the Coronavirus crisis.

“With confirmation that the UK has officially fallen into recession we believe it is more important than ever for the government to introduce a loan scheme similar to that in Wales, which will ensure all tenants are able to pay their rent, and landlords can continue providing much needed housing for the private rental sector” explains Belvoir chief executive Dorian Gonsalves.

“Although the rental sector remained robust throughout lockdown, the furlough scheme is due to end in October and there is inevitably some uncertainty about how this will impact on the job market and the ability of a small percentage of tenants to pay their rent” he continues.

“A loan system of the type operating in Wales will help to protect tenants by ensuring they can continue to pay rent and reduce the risk of evictions. In the long term a loan system to subsidise the rental market and protect tenants may ultimately be less costly for the government than a potential increase in homelessness, especially as councils will struggle to rehome people due to a shortage in social housing.”

Under the Welsh Tenancy Saver Loans scheme, which kicks off next month, the loan payment will be made directly to the agent or landlord.

The tenant will have to apply for the loan: they will then be given up to five years to pay back the money at an interest rate of one per cent APR.

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Courts will reopen on September 21, although a further eviction ban will be put in place over Christmas, the government has confirmed.

In a statement the government said that – except in cases of anti-social behaviour and domestic abuse – there will be a pause on evictions over the festive period, with bailiffs unable to evict.

If an area is in a local lockdown that includes a restriction on gathering in homes, evictions will also by unable to be enforced by bailiffs.

The government also reiterated last month’s announcement, that the notice period – again with exceptions for criminal behaviour – would be increased to six months, which it said will keep tenants in their homes over the winter and give them the chance to find somewhere else to live.

Announcing the plans to halt evictions at Christmas it said: “There will also be a ‘winter truce’ on the enforcement of evictions, with no evictions permitted in England and Wales in the run up to and over Christmas except in the most serious circumstances, such as cases involving anti-social behaviour or domestic abuse.

“This will ensure vulnerable tenants are not forced from their homes at a time when public and local authorities may be dealing with the usual level of increased demand for services during this time. To achieve this, guidance will be issued to bailiffs that they should not enforce possession orders in the weeks of Christmas.”

The government did not elaborate or confirm what was meant by the ‘weeks of Christmas’ when asked.

The NRLA said it is pleased the government has reiterated its commitment to reopening the courts.

NRLA policy director, Chris Norris said: “We welcome confirmation that the courts will begin to hear possession cases again from the 21st September.

“It is vital that this happens so that landlords can begin to take action against anti-social tenants, those committing acts of domestic violence and those with rent arrears that have nothing to do with COVID-19.”

MHCLG says that it will keep these measures under constant review and that its decisions will continue to be “guided by the latest public health advice and support with housing costs may also be available for those on low incomes or who are out of work eligible for Universal Credit.”

It also thanked landlord for their ‘forbearance’.

It said: “No landlord, including those who only rent out a single property, has had access to the courts since March, including to regain possession in cases where the tenant has broken the law. So it is right that landlords are able to access justice, alongside measure to protect the vulnerable. The government would like to thank landlords for their forbearance during this difficult time.”

Housing Secretary  Robert Jenrick MP said: “We have protected renters during the pandemic by banning evictions for six months – the longest eviction ban in the UK. To further support renters we have increased notice periods to six months, an unprecedented measure to help keep people in their homes over the winter months.

“It’s right that we strike a balance between protecting vulnerable renters and ensuring landlords whose tenants have behaved in illegal or anti-social ways have access to justice. Our legislation means such cases will be subject to shorter notice periods and then prioritised through the judiciary’s new court processes.”

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Almost a quarter (22 per cent) of private landlords with properties in England surveyed have lost rental income as a result of COVID-19 according to new polling.

The research, conducted online by YouGov for the National Residential Landlords Association, found that whilst 19 per cent of those questioned had lost up to half of their usual rental income as a result of COVID-19, three per cent had lost more than half.

An analysis of the results by the NRLA suggests that among those landlords surveyed saying that they have faced a loss of rent, the average (median) loss was between £751 and £1,000. Applied across the sector as a whole, this suggests that the total rental income lost by private landlords with properties in England as a result of COVID has been between £328m and £437m.

The same survey shows nine per cent of landlords say they plan to leave the market altogether with seven per cent saying they will sell some of their rental properties over the next 12 months. This would serve to choke-off the supply of available homes for those unable to afford a home of their own, those struggling to access social rented housing and those who prefer the flexibility that the private rented sector provides.

With the polling showing that 61 per cent of landlords surveyed rent out just one residential property, and 34 per cent of those saying they are retired, with rental income representing all or part of their pension, the NRLA argues that it is unsustainable to expect landlords and tenants to be building up rent arrears indefinitely.

Ahead of the courts beginning to hear possession cases again on 20th September, the NRLA is calling for an urgent financial package from the Government to pay off COVID related rent arrears and sustain tenancies.

The NRLA proposes that the UK Government follows the examples set in Wales and Scotland and develops interest free, government guaranteed hardship loans for tenants to cover arrears built since lockdown started in March.

Ben Beadle, Chief Executive of the National Residential Landlords Association, said:

“Where COVID-19 has caused difficulties for tenants, the vast majority of landlords have reached agreements with them to avoid problems. That said, most landlords are not property tycoons and cannot be expected to go indefinitely without any or only part of the rent they are owed.

“To date there has been no direct financial support for the rental market, with individual landlords unable to access small business grants or bounce back loans. The furlough scheme is due to end, benefits do not cover average rents in any given area and the mortgage deferral scheme only builds up the amount landlords have to pay for the remainder of the term of their mortgage.

“The Government needs to step in and ensure tenants and landlords in England have the same level of support being provided in Scotland and Wales to pay off rent arrears and sustain tenancies.”

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The latest announcement from Housing Secretary Robert Jenrick suggests the eviction ban WILL end at last on September 20.

However, more concessions have been made with a commitment from the government not to stage evictions over the Christmas period in England, while in parts of the country undergoing local lockdowns there will be no enforcement of evictions by bailiffs.

In addition the government has changed the law to increase notice periods to six months meaning renters now served notice can stay in their homes over winter, with time to find alternative support or accommodation.

The only exceptions to this are what the government calls “the most egregious cases” including where tenants have demonstrated anti-social behaviour or committed fraud.

A statement from Jenrick last evening outlined the new measures and added: “This support [for tenants] builds on the unprecedented package the government has put in place to help communities through the pandemic, including support for businesses to pay staff salaries and strengthening the welfare safety-net with a nearly £9.3 billion boost to the welfare system.

“This includes an extra £1 billion to increase Local Housing Allowance rates so that they cover the lowest 30 per cent of market rents, meaning we now spend £25 billion supporting households to meet the cost of rent in the private and social rented sectors.

“For those renters who require additional support, there is an existing £180 million of government funding for Discretionary Housing Payments made available this year, an increase of £40 million from last year and which is for councils to distribute to support renters with housing costs.”

ARLA Propertymark’s Timothy Douglas, Policy and Campaigns Manager, comments: “Over the past few weeks the government has drip fed updates about evictions to the sector making it impossible for agents to respond and plan for the difficult months ahead. The UK government are moving the goal posts, introducing measures that will be difficult for many to implement, including staying on top of rapidly changing local lockdowns.

“Whilst it looks like there will no further delays on the resumption of possession hearings, agents have profound concerns about investment in housing and this announcement offers no further support for the sector.

“The government must now look at additional measures to provide direct finance to landlords and tenants to cover Covid related arrears and help boost confidence in the sector as we head into the winter.”

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Letting agents are being warned they are likely to face a higher number of mandatory electrical checks as the sector expands and tenant demand rises.

PropCert, a national provider of property certificates, says the surge in demand following the reopening of the market looks set to continue into autumn.

The most recent regulation change affecting new tenancies is the introduction of The Electrical Safety Standards in the Private Rented Sector (England) Regulations 2020 on July 1.

It is now a requirement for an EICR report to be carried out before the start of all new tenancies, with all fixed electrical installations inspected at least every five years by a qualified professional.

There are a range of other tasks for landlords – or letting agents working on their behalf – including providing copies of EICR reports to new tenants.

“The new regulations mean that there is now a greater demand for professionals carrying out electrical checks than ever before. High tenant demand means that agents and landlords will be under pressure to get these checks completed quickly so moves aren’t delayed” explains Tom Harrington, PropCert’s managing director.

“Since the new rules were introduced in July, property professionals may have realised that they need to assess the electricians they work with and the processes they have in place to keep up with demand and remain compliant.”

Harrington urges agents and landlords to implement technology-led processes to manage the rise in checks, and to recruit a large pool of electricians who can be contacted to work at short notice.

“An efficient online system can help agents and landlords to manage their ever-growing workloads, while knowing they are compliant with the new regulations” Harrington says.

“Ultimately, mandatory electrical checks have been introduced to protect tenants and landlords’ investments. Therefore, managing the process through trusted suppliers and using the services of the best qualified electricians is in the interest of all stakeholders” he concludes.

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Labour’s housing spokeswoman says “after the incompetent handling of the exams fiasco, the government must act now to avoid more chaos of its own making” in the shape of private rental evictions.

Shadow Housing Secretary Thangam Debbonaire has written to Housing Secretary Robert Jenrick to say that with the furlough scheme coming to an end and Coronavirus infections rising, the government should set out how it would prevent a “self-made homelessness crisis”.

She writes: “Veering from crisis to crisis is no way to run a country… after the incompetent handling of the exams fiasco, the government must act now to avoid more chaos of its own making.”

Debbonaire is calling for emergency legislation to ensure no one will lose their home because of Coronavirus.

Her letter says Labour does not want to see the ban on evictions lifted until “the government has introduced changes to our broken housing system that will protect tenants”.

Specifically this means the permanent abolition of Section 21 evictions and revisions to Section 8 evictions to prevent automatic eviction for tenants whose income had been hit by the pandemic.

Debbonaire cites the figure provided by campaigning charity Shelter, claiming some 227,000 private renters have fallen into arrears since the pandemic and could lose their homes when the ban on evictions is lifted next week.

The National Residential Landlords Association disputes the figure.

Earlier this week nine Labour and 10 Liberal Democrat MPs urged the government to guarantee councils financial support to house rough sleepers for a year, and former shadow chancellor John McDonnell demanded the ban on evictions be extended for at least a year.

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