Agents will need to manage tenants to mitigate Eviction U-turn impact
On Friday, the Government announced that it would extend the eviction ban for a further four weeks, along with introducing a minimum six-month notice period for landlords who wish to evict their tenants in England.
Paul Offley, Compliance Officer at The Guild of Property Professionals, says that following the latest announcement, in the UK there are currently four different processes for a landlord to seek possession using a section 21 notice across England, Wales, Northern Ireland and Scotland, varying in notice periods from three to six months and review dates of notice periods from 30th September 2020 to 30th March 2021.
“Whilst the announcement could be seen as good news for tenants as it gives them the security of having a home, especially during a time when so many have been effected by the financial impact of the pandemic, it begs the question – what about the landlord?” asks Offley.
He says that, while the eviction notice in England is moving to six months, it could take far longer for landlords to go through the eviction process, especially if the tenant fails or chooses not to give up possession after the six-month period has lapsed.
“The landlord would then have to start legal proceedings and pay for a hearing and wait for a court slot, which could take another six to eight weeks to get. If the tenant pleads that they have no money, the judge will normally then give the tenant an additional 14 days to vacate the premises. It will have to go court again, at which time the judge would rule whether a bailiff would be appointed to evict the tenant. All in all, it will be some time before the landlord gets their property back,” Offley explains.
“During this notice period, landlords may not be able to access ‘mortgage holiday periods’, which will result in a loss of income for them. Another aspect that landlords will need to consider is that during the notice period, they are still legally bound to maintain Health and Safety issues within the property but may not have any rental income coming in to pay for repairs. If the boiler breaks for example, it will need to be fixed at the landlord’s expense, whether they are receiving an income from the property or not.”
“In the instance where an agent is managing the property, they will also still be responsible for doing so, even though they will not be receiving an income. It is unlikely that the Government will make a U-turn on this, so agents need to be working hard on arrears management so that problems and risks are reduced. The key aspect will be for landlords and agents to be able to manage the situation with their tenants and possibly agree on a payment plan where feasible,” Offley comments.
He adds agents should communicate to tenants that if they can’t pay their rent at any point, they should inform the agent without delay. If the tenant says they cannot pay due to impact of employment or income relating to Covid-19, then they should be asked to provide proof by sending either a letter from their employer or bank statements. “Once an agent is aware of a problem, they should work with the tenant on getting the situation resolved as soon as possible to avoid having to go down the long eviction route, and rather look at alternate options that will work for both the landlord and tenant,” Offley concludes.
In other reaction to the extension of the evictions’ ban, Elisabeth Kohlbach, CEO of Skwire, said:
“The last-minute U-turn to extend the ban on landlords evicting tenants in England by another month until 20 September is a misstep. Such brief, periodic extensions are unlikely to offer any real help to tenants without specific legislation, and adds further pressure on landlords who are not only unlikely to evict those with Covid-related financial problems, but have been unable to deal with significant arrears.
“Indeed, this decision further shifts the burden to the many landlords who are depending on rental income to get by and have had no government support, away from tenants who, thanks to upfront affordability checks and furlough pay, have been supported to keep paying rent. The decision doesn’t satisfy either side, and neither will another short extension further down the line.”
David Alexander, joint managing director of apropos, commented:
“The government’s month-long delay in re-introducing tenant evictions is the right thing to do and welcome. However, there needs to be comparable, more visible, and active support for landlords during this time. If it is right to support tenants’ in financial difficulties, then it must be right to financially support landlords who will be impacted by this move.”
“Too often landlords are barely considered by government and they need as much support, both financially and with vocal support from ministers, as tenants do at this moment. This support should come in the form of grants, favourable bank lending and encouragement from lenders to be sympathetic and supportive of landlords many of whom will be experiencing financial difficulties.”
“There is always a danger of polarisation in the PRS with tenants on one side and landlords on the other. The truth is both sides need each other, and they all require the support of the state to get through this difficult period. Landlords need tenants and tenants need landlords. There must be greater support for landlords now and in the future. Without landlords there is no PRS and without the PRS there is a serious shortage of homes for tenants.”
Comments (9)
LL when will you realise that Govt seeks your destruction!?
They especially wish to eradicate mortgaged LL. There isn’t much they can do to mortgage free LL. But remember they comprise only 50% of the PRS.
Govt would love to get rid of all mortgaged LL. So expect NO support at all. Mortgaged LL who consider they cannot survive feckless rent defaulting tenants would do well to de-risk and try and become mortgage free.
Inevitably that means LL selling off millions of BTL properties This is vital for LL to do for them to achieve financial resilience in the face of such feckless rent defaulting tenants. At least if a LL is mortgage free a lender can’t repossess. .The system is set up to support feckless rent defaulting tenants.
The Big Question is do LL wish to be the victims of feckless rent defaulting tenants!?
Perhaps we are all missing the fact that Government has failed with its so called social security system? If the system were working properly then those with temporary interuption of their income should be looked after by the state which means, subject to means testing, assisting with housing costs. Something the good hardworking people of the UK have contributed towards with their taxes. Or maybe the ineptitute of Government is that they support those in society that milk the system, those who arrive illegally in dingies and have 4* luxury hotel accommodation provided rather than held on a floating redundant cruiser moored 10 miles off shore whilst their status is determined. The genuine refugees complying with the correct procedures are disadvantaged for doing the right thing whilst the bully boys rushing the UK get first dibs?. Are the same policies being applied to housing? with the government protecting those who can pay but choose not to (by now giving them over half a year of grace before they can even be considered for eviction). Again, failing those who should be supported over those who barge their way forward or play the system. If the Government want to provide housing (rather than previous policy of assett stripping it) for the social sector fine but don’t expect the private sector to do this whilst the Government are raping and abusing the system – no not the system but the working people that have saved to bettered themselves with hard work – after all this abuse only occurs because the PRS is made up of mainly normal hard working Joes ( the small people) who wanted to protect their futures. Remember many landlords achieved their investments by saving and not spending all their disposable income to give themselves a better future. After all the Insurance companies are ripping people off with their pension savings and can no longer be trusted. Now thanks to Conservative Government policies they are attacking the investment of those who have worked harder or gone without to provide for the future for themeselves and their kin and homes for those who can buy. BJ is no Churchill.
During the second world war we stopped an invasion. Today we can’t stop a dingy!
It doesn’t matter which government is in power (it certainly would be worse with Labour). The problem is they don’t want evictions … the government have no room in the inn and many they don’t want back.
Very well said Will, my thoughts exactly
What is the Nrla doing??
The Nrla should be challenging the government on behalf of all its members.
The landlord robbing has gone on far to long.
S24, REGS, 30000 FINES, now they have stopped us evicting tenants who are not paying rent even when paid 80% from government.
Landlords have been given no support. They can’t claim grants or furlough.
Not considered a business but have red tape and fines exceeding most businesses
The mortgage holiday, what a joke, resulted in tenants believing they didn’t have to pay rent, stops you getting a better remortgage deal and gives you nothing to live on and pay for repairs.
The simple answer to this is as they have done in Wales and Spain.
STEP 1 – Grant the tenant an interest free loan repayable over up to 5 years for arrears from March until now
STEP 2 – Pass the money directly to the landlord
STEP 3 – Make sure the Housing element of any benefits is paid in full direct to the landlord. Some tenants feel they cannot make ends meet “so lets not pay the rent instead”
STEP 4 – Please do some joined up thinking. When you destroy the PRS what will you replace it with ?
Dave Absalom
There will be desperate landlords who will take the law into their own hands and force the tenants out one way or another without proceedings.
This will then be used by charity Shelter to push their own agenda.
ARLA AND NRLA need to represent landlords and come up with a better solution for to the state housing problem.
Is t the right thing to do, to destroy the prs?
Sadly when government are constant chasing tenant votes and cannot make balanced fair decisions landlords will continue to be treat unfairly. Nothing will change as labour are standing behind shouting they will bash landlords even harder.