Some landlords could find themselves without rental income for two years if a ‘perfect storm’ of circumstances affects their lettings and they find themselves unable to evict unsatisfactory tenants.
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 23rd 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 per cent) 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.”
Welcome Ben Beadle. It’s about time that the RLA and NLA grew a pair, and you seem to have one in spades.
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Agreed but the challenge is not to put out press releases but to get the senior civil servants at the DCLG to listen. This happens behind closed doors and its about relationships and credibility and it is hard to quantify. That said, we need strong, relentless communication which is aligned by both ARLA and NRLA.
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A message to the Conservative Party: LANDLORDS ARE VOTERS TOO but more responsible than protesters intent on spreading the virus during a pandemic, criminal who pull down statues because they don’t like history, illegal immigrants who ignore entry rules into the UK, people who hold illegal raves on the Kent coast. I guess the conservative party reward those they should not and punish those who are responsible members of society. GET A GRIP.
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Yes Nlra
Letters to government are pointless you need to be challenged in court. They have continuously attacked the PRS.
They have caused untold misery for the PRS
..
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The Government has proved time and time again that it does not listen (it goes through the pretence of consultations, etc then does what it wants).
The time for “talk” is over, and action is needed, the Government must be forced to listen, and treat Landlords fairly.
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I have a property for which the tenant hasn’t paid rent since October 2019. Eviction order granted by the courts on March 19th (phew -we thought).
It was up for a High Court eviction order yesterday – been pushed back until at least 20th October.
Absolutely disgraceful situation – even with an award for costs (which we have) there is no chance whatsoever of recovering the money – and in the short term, the property.
If this was a landlord that relied on the rent for his income – he’d be destitute by now. Tenant is sitting pretty. It’s soul destroying
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The Law needs to be change so that rogue tenants cannot just walk away for their debts. Their needs to be an automatic attachment to earnings or benefits.
Tenants then knowing that they can’t get a way scot-free will change their behavior.
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Well said, Ben. Spot on.
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In some cases the mortgage company will be taking back control of the properties as some landlords simply won’t be able to pay their mortgage on the BTL, leaving both the tenants and the landlords credit in tatters at the end of all of this.
Absolutely ridiculous situation! It is not encouraging resolution of the issue at all.
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Time they did with the civil servants in Education who thought they have a job for life, doing their own thing, with those in Housing. Ministers come an go and I have always considered civil servants are the brick wall that needs knocking down.
I have a tenant who has everything paid by the state, you name she gets it. Now not paying the rent because she claims Covid-19 is causing her financial hardship!!! Utter nonsense.
I have another landlord, elderly living in a care home (needs must) and requires the rent to subsidies. No need for a rocket scientist work out what happens when the tenant stopped paying.
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Utter shambles, as usual government decisions made before any consultation with industry bods. Good landlords do not deserve this.
If hardship loans to tenants are introduced in England then what are the chances that the tenant uses this to pay of any arrears? More likely be spent elsewhere….
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Bravo to the author of this article.
“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.”
Exactly. I think the perception of a landlord is terribly skewed here in the UK.
All of the legislation surrounding residential tenancies should be equally stringent to both tenant AND landlord;
In the same way that the landlord is mandated to provide safe, clean, habitable accommodation, the tenant should be mandated to look after the property and pay the rent immediately it is due. No ifs. buts or maybes.
If either party fails on their respective basic duty (above), they should face the full force of the law instantly.
How can a situation like DASH94’s be allowed to happen? Disgraceful.
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I understand that what you’re saying is how things sometimes are and ought to be.
However; let us not fool ourselves into thinking that most landlords do not do the bare minimum (often less until relentlessly hounded) in order to make a property liveable.
I appreciate and agree that landlords are being treated ridiculously and the PRS will likely not recover from this, but let’s not get carried away with the notion that landlords are benevolent shelter givers.
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There will be some that run up a 20k debt and spend it all to leave no assets then do a Debt Relief Order DRO for only £90 which see the debt written off and they walk away with very little consequence.
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