Government must U-turn again to help landlords

12:11 PM, 27th August 2020, About 4 years ago 34

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The Government’s plans to extend the evictions ban could leave private landlords without any rent for up to two years.

In a letter to the Prime Minister, the National Residential Landlords Association (NRLA) has said that the Government is asking landlords to subsidise struggling renters and rewarding those who are wilfully refusing to pay their rent. It is also causing continuing hardship to communities and families suffering anti-social behaviour and domestic violence perpetrated by tenants.

This follows the chaos last week which saw Ministers embark on a last minute U-turn over plans for repossession cases to be heard in the courts from 23^rd August.

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. Added to this is the six months’ notice that landlords now have to give. 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, this means a potential lost income for a landlord of up to two years amounting to £20,800.

The letter points out to the Prime Minister that the vast majority (94%) of private landlords are individuals, renting out just one or two properties. They are not property tycoons with deep pockets able to subsidise rents indefinitely but are ordinary people who rely on this income to pay their living expenses. The NRLA is warning that the Government’s failure to provide any direct financial support for the sector during the pandemic means that many landlords will be forced to seek money claims against renters building arrears. This would leave tenants’ credit scores in tatters.

The NRLA argues that the only route out of the mess of the Government’s own making 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.

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

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

“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’s 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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Comments

Old Mrs Landlord

8:54 AM, 29th August 2020, About 4 years ago

Reply to the comment left by Ingrid Bacsa at 29/08/2020 - 00:15
You are right Ingrid we are now, or will become as unemployment increases, involuntary social landlords. However, if you read Bill Irvine's posts on the thread 'What do I need to know about renting to unemployed people?' we have nowhere near the rights and access of the social sector. For instance they get paid the service charges on flats, which would make a big difference to those of us who haven't been able to increase rent for more than a decade on a flat where there has been a 50% increase in the service charges, plus extra one-off lump sum charges. If we are perforce to provide council housing one would think the least they could do is give us a level playing field!

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Seething Landlord

0:18 AM, 30th August 2020, About 4 years ago

Reply to the comment left by Dr Rosalind Beck at 27/08/2020 - 14:54
Just to pick up on one point, if the debtor has savings why would you need an attachment of earnings order?

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Dr Rosalind Beck

0:21 AM, 30th August 2020, About 4 years ago

Reply to the comment left by Seething Landlord at 30/08/2020 - 00:18
How would you get the money from their savings into your account?

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Seething Landlord

0:36 AM, 30th August 2020, About 4 years ago

Reply to the comment left by Dr Rosalind Beck at 30/08/2020 - 00:21
Possibly by a garnishee order (not sure if that is still the right description but it is essentially a court order requiring a bank to release funds to satisfy a judgement debt), instructing bailiffs to collect the debt, instigating bankruptcy proceedings. An attachment of earnings order is really only a last resort when the debtor has no other means of satisfying the judgement, which I accept is very often the only option with a defaulting tenant but would not apply in this case.

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Dr Rosalind Beck

0:50 AM, 30th August 2020, About 4 years ago

Reply to the comment left by Seething Landlord at 30/08/2020 - 00:36
Thanks for the info. I'm not familiar with these procedures, but they sound useful. Do you also know what happens when you get a charge on a property? Since we must really insist on homeowner guarantors now given the extreme anti-landlord legislation being passed, I wonder how one gets the settlement when one pursues the guarantor.

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Seething Landlord

9:23 AM, 30th August 2020, About 4 years ago

Reply to the comment left by Dr Rosalind Beck at 30/08/2020 - 00:50
Recovering money from a guarantor is the same as pursuing any other debt so to start with you have to establish that he actually owes you the money. He might challenge the validity of the guarantee and / or the amount of your claim. You can only established his liability and enforce payment through court proceedings which might of course be defended on various grounds, including those already mentioned but if you succeed in obtaining judgement against him and he still refuses to pay you are faced with the usual options, one of which might be a charge on his property. I have no experience of the process involved but understand that it operates in the same way as a mortgage or loan charge in that you would have a claim on the proceeds of sale and in some circumstances might be able to enforce the sale of the property to realise the money owed. For most of us this is well beyond our own DIY capabilities so we would need to take proper legal advice and weigh up the cost involved.

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Seething Landlord

14:01 PM, 30th August 2020, About 4 years ago

Reply to the comment left by Seething Landlord at 30/08/2020 - 09:23
I should have said that the first stage is to ask the guarantor to pay the tenant's debt, which will hopefully result in him either paying what is due or putting pressure on the tenant to do so. We possibly under-estimate the powers of persuasion of a guarantor, particularly a parent, which is why I would involve the guarantor at the first sign of the tenant defaulting.

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Marie

13:01 PM, 31st August 2020, About 4 years ago

Reply to the comment left by Bill Williams at 28/08/2020 - 20:38
So if I give a new tenant a six month AST, does he/she have to move out after 6 months or do I have to give 6 month notice? So effectively do we still have ASTs or its a free for all for the tenants?

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Seething Landlord

16:40 PM, 31st August 2020, About 4 years ago

You can only regain possession at the end of the sixth month if the tenant leaves voluntarily. You cannot serve a S21 notice during the first four months of a tenancy and you then under the current rules have to give at least six months notice.

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RHP

17:56 PM, 3rd September 2020, About 4 years ago

I say let the government pay everybodys rent and then reclaim it back when they start work or from their Benefits,which would be immediatey as most people would be on UC or JS. pay the landlord direct so the money goes to the rent and nowhere else.
There is no other benefit that the Government and tenant takes advantage of, as HB.

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