Year: 2020

A service called Landlord Advice UK is offering free no-obligation consultations with landlords dealing with evictions over the coming months.

Under the Coronavirus Act 2020, Section 8 and Section 21 evictions notices were temporarily changed to protect tenants from eviction during the height of the COVID-19 pandemic. The legislation made longer notice periods for evictions mandatory on a temporary basis.

But those changes come to an end next month, with interim modifications to court rules taking effect to accommodate Coronavirus restrictions on social distancing and the like.

There is an estimated 5,700 possession claims ‘in limbo’ that were granted hearings just before the ban, and an estimated 60,000 new eviction notices that have been issued during the lockdown.

Landlord Advice UK claims many landlords are confused about how to go about serving eviction notices in line with current legislation and when the restrictions on eviction are due to change.

Sasha Charles, director of the firm, says: “Although some of the temporary restrictions regarding eviction are due to be lifted, landlords should continue to make all reasonable attempts to work with their tenants.

“We are already starting to see that many landlords are confused about what they can and can’t do and how to move forward when the law changes. Our advice to landlords is that it’s important to keep logs of all communication to demonstrate that reasonable attempts have been made to resolve issues with tenants before taking legal action.

“This will be helpful for landlords should the matter progress to court and will help landlords prepare to follow the new court protocol which is yet to be enforced. The new protocol will require landlords to make further efforts to resolve issues with their tenants before taking legal action.”

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A Liberal Democrat bid is underway to accelerate the government timetable to scrap Section 21.

The Renters’ Rights Bill put forward by government 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.

And instead, the government has introduced temporary changes to the eviction court process to cope with Coronavirus restrictions.

This has angered opponents of S21 and now Lib Dem Baroness Olly Grender has taken the unusual step of invoking a little-known Parliamentary procedure known as a “prayer against.”

This seeks to scrap changes to the eviction processes introduced to cope with the Coronavirus backlog, known as Civil Procedure Rules.

Speaking to the i newspaper, Baroness Grender said of her tactic in the Lords: “This is the strongest opposition Parliament can take to the Civil Procedure Rules change – and we hope everyone will rally behind this. The Liberal Democrats will continue to hold this government to account and stand up for renters rights.

“Ministers have signed off for their summer holidays without so much as a backward glance at all the renters they have left in the lurch this summer … What the government should have done is fulfilled their election promise and scrapped no-fault evictions altogether, but instead they have just gone back to business as usual, allowing evictions of tenants with no explanation.

“The fact they snuck these rules out without guidance and without Parliamentary scrutiny demonstrates once again that for this government, renters will always be left behind.”

Another Baroness – Alicia Kennedy, the director of campaign group Generation Rent – is also quoted in the i saying: “These rules alone are worthless and will not help the vast majority of renters who are at risk of losing their home.

“Coronavirus has created a rent debt crisis, which is set to get worse as the furlough scheme is wound down. Renters who have been left out of government support schemes have now been left in the dark. The government must provide clarity on how renters affected by coronavirus will be protected from eviction and homelessness.”

The tactic used by Baroness Grender obliges the government to address the issue – however, there is a 40 day deadline, meaning it is unlikely to be debated until September, by which time evictions court processes will have resumed anyway.

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The strict procedures landlords must now follow when bringing forward possession cases have been laid out by government.

Ministers announced there would be changes to the process on Friday – and have now released  more details as to what landlords will need to do under new Civil Procedure Rules.

Courts will reopen on August 24 following a five month ban on evictions, introduced by the government in a bid to protect renters during the Covid-19 crisis.

The principle changes are that landlords will need to confirm they wish to make or continue with a claim by filling in a reactivation notice and sending it to the court and the tenants and must take into account how tenants’ circumstances have been affected by coronavirus.

New rules

The government says landlords must follow ‘strict procedures’ if they want to gain possession of their property, depending on the type of tenancy agreement in place and the terms of it.

The new rules mean:

• Landlords seeking possession of their property to set out in their claim any relevant information about a tenant’s circumstances, including information on the effect of the COVID-19 pandemic on a tenant’s vulnerability or social security position.  These rules will apply to all possession proceedings either new or existing, including accelerated possession proceedings. Where this information is not provided, judges will have the ability to adjourn proceedings.  These changes will be in place until the end of March 2021 but could be extended.
• Landlords will need to notify the Court and their tenant of their continued desire to seek repossession before the case will proceed using a ‘reactivation notice’. This rule includes accelerated possession cases and the government says it will ensure that the Court’s time is spent on the right cases. However a reactivation notice will NOT be needed for any claim where a possession order has been granted, suggesting landlords can move to execute the warrant via bailiff services.
• The court will have flexibility on setting the date for the court hearing to allow it to fix a date either on or after the claim form is issued to the landlord. Currently a hearing date is set at the same time as the claim form is issued. The requirement to fix a hearing eight weeks after the claim form is issued to landlords will be suspended.
  Landlords will need to provide a rent arrears history in advance of the hearing , rather than providing at the hearing itself.
• High Court bailiffs will be required to provide notice of the eviction date to the tenant, in the same way that notice is provided by county court bailiffs. The notice will include information on how the tenant can apply to suspend the eviction and where to go to for advice.

Priorities

The Government has stressed it is keen to encourage landlords wherever possible, NOT to pursue non-priority cases through the courts.

It considers priority cases to be those involving anti-social behaviour, extreme rent arrears, domestic abuse, cases involving squatters, fraud or unlawful subletting. The NRLA welcomes this move, which came about after the association lobbied the Government on the issue.

It is also encouraging landlords and tenants to consider mediation, in which an independent third-party helps both parties reach a mutually acceptable agreement to resolve their dispute, without the matter needing to go to court.

NRLA chief executive Ben Beadle sits on a Government-led working group, alongside representatives from across the industry, which continues to look at other measures to support the reopening of the courts.

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A survey by The Tenancy Deposit Service suggests that half of landlords have experienced damage to their rental properties by pets.

And it warns that a spike in pet ownership during the Coronavirus crisis has led to an increased risk of damage to rental properties.

The survey, which involved some 1,500 landlords, also found that 70 per cent feel that tenants should not automatically be allowed to keep a pet in a rental property.

Despite that, 82 per cent of landlords still allow tenants to keep a pet in their rental.

The poll, which involved 1,500 landlords, also showed that two thirds would want to be able to raise the rent if they were forced by law to allow their tenant to keep a pet in their property.

However – with pet deposits banned as part of the Tenant Fees Ban – just over half of landlords surveyed said they would be prepared not to raise the rent if pet deposits were reinstated.

Prior to the ban being introduced in June 2019, a third of landlords asked their tenants for an additional pet deposit. Only four per cent charged a higher rent and 63 per cent did neither.

According to the veterinary charity PDSA, half of UK adults own a pet. Nearly 11m are cat owners and 9.9m own a dog.

“There is a potential conflict here between pet ownership among tenants and landlords who are concerned about the impact of animal damage. The issue is that landlords are unable to introduce additional fees because of the Fee Ban” explains TDS chief executive Steve Harriott.

“We want to know what people think about this. Do they want pet deposits reinstated or could rents be raised to cover any additional costs that may be incurred for a renter keeping an animal at the property?

“Our findings show there is an ongoing  debate on this issue, but until it’s finalised, we recommend all tenants are open and honest when it comes to their pet ownership and communicate with their landlord so a compromise between both parties can be sought.”

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The latest data and analysis from London lettings and estate agent, Benham and Reeves, has revealed where to invest in the capital to take best advantage of the stamp duty holiday and secure the biggest rental yields.

According to the latest figures, across the capital, current rental yields averages 3.7%.

Based on the current average house price and rental yield at postcode level, SE17, which covers parts of Lewisham, Southwark and Lambeth, is one of the best buy-to-let options in the current market.

With an average house price in the postcode of £560,120, investors looking to buy now are in line for the maximum stamp duty saving of £15,000.

In addition to this, SE17 is home to the highest yields of all postcodes that present this maximum SDLT saving; with an average rental yield of 4.1%.

SE11 in Kennington and SE15 in Peckham, both also offer the maximum SDLT saving with yields as strong as 4%.

Other postcodes where landlords can secure the maximum £15,000 saving, as well as above-average rental yields, include the IG7, SW9, SE16, E9, SW2, N7 and IG5 postcodes with yields ranging from 3.7% to 3.9%.

There are 16 other London postcodes where landlords can save upwards of £10,000 in SDLT that are also home to above-average yields, while the SE28 postcode in Thamesmead offers the most affordable investment.

The postcode is home to an average house price of just £275,498, and while it also offers the lowest SDLT holiday, landlords can still save £3,775 with the area home to an average yield of 5%.

Other postcodes well below the London average in terms of house price but above it where rental yields are concerned include the DA1, IG11, DA8 and RM10 postcodes.

Marc von Grundherr, Director of Benham and Reeves, commented: “For far too long the government has squeezed the life out of the buy-to-let sector, and so it’s great to see that, finally, there has been some financial breathing room afforded to landlords.

“As the backbone of the UK rental space, landlords are a vital cog in the machine that so many rely on to put a roof over their head. This momentary reprieve where the cost of stamp duty is concerned means that now is a great time to invest for those considering it, those looking to expand their portfolio, and for those that have exited the sector in recent years.

“Not only is there a considerable saving of thousands of pounds in stamp duty on even the most affordable investments, but we’re seeing above-average rental yields the length and breadth of the capital.”

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A debt charity is urging the Housing Secretary to pledge that no one who has lost income because of Coronavirus will be evicted from their home even after the ban is lifted late next month.

StepChange wants the government to commit to greater protections for what it claims are an estimated 590,000 people who have fallen into rent arrears and are facing housing insecurity during the pandemic.

In addition, it wants Robert Jenrick to accelerate plans to scrap Section 21 evictions and amend court powers to give them the discretion to suspend a possession order in cases where arrears have built up.

“The government has shown through the announcement of its Breathing Space scheme, that it recognises the importance of allowing those in financial difficulty the space to recover” admits StepChange chief executive Phil Andrew.

“People who have fallen into rent arrears during the pandemic need the same respite” he adds, saying: “The government can grant them this space by making the legal changes needed to safeguard against unjust evictions and should also consider how it can help tenants pay off arrears where coronavirus has left them with no chance to repay.

“The knock-on consequences of debt and eviction can be severe for individuals and threaten to undermine the economic recovery for everyone. The government must act to prevent this.”

The letter sent to Jenrick has been co-signed by the new director of campaigning pressure group Generation Rent – the former Labour baroness, Alicia Kennedy – who says: “Renters urgently need reassurance that they will not lose their home due to the economic shock of Coronavirus, as the government promised in March. The government must use the final days of parliament to ensure that no home is at risk.”

You can see the joint letter below.

As two charities covering housing and debt, we welcome the government’s efforts to protect vulnerable tenants through changes to the Civil Procedure Rules on evictions. These acknowledge the hardship caused by the coronavirus emergency and the need for landlords to consider this when dealing with tenants.

However, with just a few short weeks remaining until the ban on evictions is lifted, we’re concerned that steps are not being taken to ensure these changes will have the necessary legal backing to fulfil your department’s aim that no-one who has lost income because of coronavirus should be evicted from their home.

StepChange estimate that since lockdown measures were introduced more than 590,000 people have fallen into rent arrears and are facing housing insecurity, over 200,000 in the private rented sector. A further 3.8 million people borrowing to make ends meet, most often using a credit card, an overdraft or high cost credit.

The government was quick to act in support of homeowners, which we welcomed, but renters have not been given the same consideration. Generation Rent found that 58% of renters were afraid of eviction despite the government’s ban. This reflects concern about the ability of landlords to evict tenants using powers in the Housing Act 1988 without appreciation for household circumstances. This cannot be right in the context of a global pandemic in which many are facing acute financial hardship.

Last week, the government announced that its Breathing Space scheme will go live in May next year. We welcome this recognition that people need time to recover when facing a crisis. The same principle should be applied to renters who have been hardest hit by the coronavirus outbreak. To give them space to recover, plans to end S21 evictions must be accelerated. Alongside this, temporary changes need to be made to Ground 8 to give courts discretion when granting a possession order in cases where arrears have built up because of the pandemic.

The government has acted admirably during the pandemic to protect jobs and livelihoods. It has also proven its ability to act quickly, passing emergency legislation in days. We are living through one of most challenging times in living history, yet for renters, the countdown clock to homelessness and prolonged housing insecurity is ticking. We urge you to act to ensure these protections are in place before 23 August. 

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The average cost of renting in London has fallen dramatically in the wake of the coronavirus lockdown as the number of available rental properties has soared.

Both room rents, and rents for entire properties, have fallen compared to the same time last year according to new figures released by SpareRoom and Rightmove.

Asking rents in London dropped by 0.6 per cent to an average of £2,046 a month between April and June compared to the same quarter last year.

Why are rents falling?

Rightmove attributed the fall to a 41 per cent increase in rental stock following a surge in vacant Airbnb-style flats being repurposed as long-term rentals as the impact of an extended lockdown period hit the short lets market.

A survey of 400 landlords carried out by Rightmove found that one in four plan to expand their property portfolio to take advantage of the stamp duty holiday announced last Wednesday. This could lead to a further influx of properties in the rental market.

Rightmove’s Miles Shipside said: “Many renters may feel they’ve been left out of the Chancellor’s recovery packages, but one glimmer of hope is that the temporary stamp duty savings may entice more investors to expand their portfolio. If this does happen we could see more choice for tenants and in turn prices may stabilise for a while, but it will take some time.”

The property search site also pointed to signs that London renters are moving out of the capital after lockdown, freeing up homes in the inner city but increasing demand for property in other locations.

Asking rents outside the capital rose 3.4 per cent between April and June this year, hitting a record £845 per month, with phone and email enquiries to non-London agents at an all-time high on Saturday June 6, 2020.

“There are early signs that some existing London renters are looking to move further afield, adding to the large increase in the number of properties up for rent on Rightmove in the capital, so prospective tenants there could find there’s some room to negotiate especially if they are happy to sign a longer-term contract than usual,” said Mr Shipside.

Where have London rents fallen the most?

Rents in the capital’s most expensive central neighbourhoods have fallen the most, while cheaper outer London areas recorded stable prices.

SpareRoom’s figures, which look at the cost of renting a room in a house share, found that rents fell by 20 per cent to an average of £919 s month in Kensington; by 17 per cent to £824 a month in the City’s EC1 postcode; and by 16 per cent to £751 in the Vauxhall/Stockwell postcode of SW8. North Kensington, W10, also saw a drop of 16 per cent take average rents down to £756.

In contrast, some of the cheaper south-east London postcodes saw average rents fall by just one per cent, yet neighbourhoods such as Penge and Eltham saw average rents actually rise by seven per cent.

Room rents were also up in Dulwich, Lee, Deptford, Norwood and Crystal Palace, all in south-east London.

Director of SpareRoom Matt Hutchinson said: “Restrictions on moving home, the fact that people’s incomes have been negatively affected and a ‘flight from London’ to other areas of the UK are all likely to be factors.

“Another possible trend that could be putting downward pressure on London rents is a move away from areas with London Underground connections, which traditionally command a premium.

“With ongoing working from home and coronavirus fears putting people off getting on the tube, people may be looking instead at areas on the Overground. That would explain why rents are faring better in some areas of south east London.”

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On Wednesday July 1st a virtual hearing took place at York County Court which ended with the historic ruling whereby agents and landlords, in the private rented sector, cannot discriminate against any tenants receiving housing benefits.

The Court decided that the banning of DSS recipients who need welfare benefits to live, cannot be discriminated against when renting or applying to rent ‘homes’ as it breaches the Equality Act.

The landmark ruling has been brought about by the housing charity Shelter who has been continually campaigning against landlords and agent using ‘No DSS’ clauses in accepting applications from prospective tenants.

District Judge Victoria Elizabeth Mark said: “Rejecting tenancy applications because the applicant is in receipt of housing benefit was unlawfully indirectly discriminatory on the grounds of sex and disability, contrary to […] the Equality Act 2010.”

The case was brought against a letting agent by Shelter’s strategic litigation team as its ‘policy’ specifically stated it would not let any of their properties to a single mother of two, because she was on housing benefits.

Shelter claims that 63% of private landlords will not take on, or prefer not to let to people who are on benefits.

The tenant, named as Jane to protect her privacy, says: “I was shocked and found it very unfair that they wouldn’t even give me a chance.

“I had excellent references from both my landlords of the last nine years as I’ve always paid my rent on time and I had a professional guarantor.

“I could pay up to six months’ rent in advance if they wanted it because my parents lent me the amount, which I then paid back to them monthly. “But when the letting agent wouldn’t take me because of a company policy, I felt very offended that after all those years, when I have prided myself on paying my rent, paying my bills, being a good tenant, it just meant nothing.

“When I realised we were going to be homeless because I couldn’t find anywhere, I felt sick to my stomach.”

Rose Arnall, the Shelter solicitor who led the case, says: “This is the first time a court has fully considered a case like this.

“It finally clarifies that discriminating against people in need of housing benefit is not just morally wrong, it is against the law.

“Shelter has been fighting ‘No DSS’ for nearly two years, and this win in the courts is what’s needed to end these discriminatory practices for good.

“This sends a huge signal to letting agents and landlords that they must end these practices and do so immediately.”

A spokesperson for an industry association said: “No landlord should discriminate against tenants because they are in receipt of benefits.

“Every tenant’s circumstance is different and so they should be treated on a case by case basis based on their ability to sustain a tenancy.

“More broadly, the government can also support this work by ensuring benefits cover rents entirely. It should also convert the loans to cover the five week wait for the first payment of Universal Credit into grants.”

The case was also supported by the Nationwide Foundation, the Equality and Human Rights Commission and barrister Tessa Buchanan at Garden Court Chambers.

Richard Merrick of PIMS, said: “The Work and Pensions Select Committee has already threatened to pass legislation stopping lenders from inserting clauses into BTL mortgage agreements, that they would not allow the properties to be let out to tenants on housing benefits.

“Sadly, because of the times, many people through no fault of their own, will have to apply or already have applied for welfare benefits, but will still need to rent a home.”

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Landlords across the UK have applauded the government’s new £2bn Green Homes Grant to help fund the cost of energy improvements to rented homes, as they can shortly be able to apply for vouchers.

A spokesperson for a trade body, said: “Improving the energy efficiency of rental housing is good news for tenants, landlords and local economies. We encourage all landlords to make use of this as it will mean housing standards are improved, tenants will save money and it will reduce carbon emissions across the whole sector.”

The government has announced its pledge that its £2bn Green Homes Grants will provide at the very least, £2 to every £1 that homeowners and landlords will spend on making their homes more energy efficient, this will go up to the maximum of £5,000 per household.

The Treasury has already confirmed that the Stamp Duty threshold has been moved from £125,000 up to £500,000. If a property is sold within the price range up to £925,000, the stamp duty rate will be £8% over the threshold and 15% above the second band until March 31st 2020.

The spokesperson added: “We need to boost the supply of all types of housing, including those for private rent to meet the growing demand that existed prior to lockdown. The change to the stamp duty rates for the purchase of rental homes is welcome but could go further. The additional rates should be scrapped in cases where landlords invest in properties adding to the overall supply of housing. This includes investing in new build and bringing empty homes back into use.”

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