Now that the evictions ban has ended, what issues remain for letting agents and renters?
The pandemic has left thousands of households agonising over rent arrears. Meanwhile, many landlords and letting agents haven’t been able to get back into properties back for over a year.
The Joseph Rowntree Foundation reports 400,000 renting households have either been served notice or told they might be evicted. That’s 5% of all renters.
It reports that 1m people worry about having to leave in the next three months (11% of all renters). Half of these are families with children.
Now the evictions ban has been lifted, possession hearings can proceed more normally. However, tenants will still benefit from longer notice periods until 30th September. That said, these measures will start to taper away over the summer.
Notice periods for Section 21, non-egregious Section 8 grounds and rent arrears of less than four months’ rent have already reduced to four months.
The most serious cases, such as anti-social behaviour and domestic abuse, have already returned to normal lengths.
Meanwhile, breach of immigration rules and the death of a tenant are now on the list of grounds for pre-Covid notice periods.
The threshold for what classes as serious rent arrears has also been reduced from six to four months, and the notice period will stay at four weeks until 1st October.
From 1st August, notice periods for arrears of less than four months’ rent will reduce to two months.
Perhaps not in the short-term. An estimated 11,000 rental repossession cases are awaiting action in the courts system. And, these have a median wait-time of 56 weeks from claim to repossession.
Housing groups warn that courts will buckle under the pressure. Most cases entering the system now aren’t likely to complete until well into 2022, according to a report by the research group LSE London.
Many tenants still face financial difficulties after the end of the evictions ban
Giles Peaker, housing lawyer at Anthony Gold, expects many possession claims going in, which will mean the court process will start to slow down.
“The courts are already working at about one-quarter of the capacity they were pre-pandemic, when 30 or 40 claims could be listed each morning,” he said.
“If there is a substantial backlog of evictions, that has an impact on the availability of bailiffs, which could be quite painful for landlords.”
The impact of these eventual evictions could be that renters are pushed into lower quality PRS accommodation. With many landlords now selling up, that PRS property shortage could get worse, meaning renters face more housing difficulties.
One landlord told us that if the government makes it progressively harder to evict tenants, it will mean they simply won’t be able to take on benefits claimants in future. Or indeed anyone who’s not, “absolutely squeaky clean”, he added.
“The next time, those tenants won’t get a house, especially as local councils have limited council houses for them, meaning they get put into hostels and hotels,” he said.
Thousands of tenants in rent arrears will also struggle to find future homes. This is due to damaged credit scores because of legal action, according to the National Residential Landlords Association (NRLA).
Chief executive Ben Beadle warns that without urgent help, many tenants face the prospect of losing their home.
So what should be done to help smooth and speed-up the eviction process, while protecting renters in debt?
Landlords, agents and tenants could consider a free mediation service. These aim to resolve cases without the need for a face-to-face court hearing.
Propertymark also suggests that giving landlords an automatic right for a High Court enforcement officer to enforce court possession would speed up the process.
Another option to address mounting rent arrears is to give tenants interest-free financial support. However, the government has made it clear that’s unlikely to happen.
The NRLA believes it needs to develop a financial package which ensures benefits cover the rents of those in receipt of them.
Propertymark agrees that more needs to be done to alleviate Covid-related arrears. “The furlough scheme will finish at the end of September. The UK government must build a bridge to recovery and provide a dedicated financial support package for the sector,” said policy and campaigns manager, Timothy Douglas.
He added: “The government cannot underestimate the support that letting agents have provided to landlords and tenants throughout the pandemic.
“This support has been crucial in helping to sustain tenancies and must feature in future decision-making.”
Maintaining open dialogue with renters is key to nipping problems in the bud. Using Alto’s PropertyFile functionality means you can talk to your tenants online 24-7.