When the Government announced its last-minute U-turn on ending the ban on landlord repossessions, and instead extended it for another month, much was made of protecting renters.
There was no word on protecting landlords. There was nothing said about how landlords with tenants in arrears now face the prospect of two years without rent being paid. Nor any word about those who are unable to access their own homes having rented them out while working away.
Also ignored were those fellow tenants and neighbours suffering from an occupier’s obnoxious behaviour, who now face at least another month of misery.
As an association, we understood the need at the start of lockdown for a ban on repossessions. We needed to reduce movement and ensure everyone had a secure home in which to isolate. Landlords were asked to work with tenants impacted by Covid to sustain tenancies, and our research shows that in the overwhelming majority of cases this has happened.
When the three-month ban was extended by two months, we mistakenly assumed that a plan would be put in place to enable it to end in a way that would protect vulnerable tenants while enabling justified repossessions to go ahead. Ministers gave their word that the ban would end on 23rd August.
Instead, and without any prior warning, the repossessions ban was extended by four weeks.
In addition, six months’ notice now has to be given in cases of rent arrears before a landlord can regain possession of their property.
Perhaps the biggest kick in the teeth for landlords was that the Government does not believe rent arrears are deemed serious enough for action until they have been building for at least a year. We have to add to that the six months’ notice period - and where a case is disputed, the time taken to progress this through the courts.
Even before the pandemic this was taking an average of six months. Given the backlog, this is 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 £20,800.
It is disappointing, to put it mildly, that a Conservative government seems to misunderstand who landlords are. The vast majority are not property tycoons with large reserves to fall back on. As Government data shows, 94pc of private landlords are individuals, many investing in just one or two properties as a pension. The average rental income over the previous 12 months was £15,000. Three in five landlords had a gross non-rental income of less than £20,000.
What they cannot afford to do, nor should they be expected to, is to do the work of the state in subsiding struggling renters. Yet that is precisely what is being asked of them. Announcing the U-turn last month, Housing Secretary Robert Jenrick said: “If tenants are unable to afford their rent, we encourage them to speak to their landlord to agree a solution.”
In other words, “nothing to do with us, guv.”
The result? We are hearing of landlords who have been made homeless because they cannot regain access to their homes. In some cases this is happening despite tenants wilfully not paying rent.
It could expose landlords to legal action if they are unable to meet certain requirements within their property as a result of lost income. Or they could default on their mortgages.
This is also not a satisfactory outcome for tenants. It offers no help for those who are struggling to pay the rent through no fault of their own due to the pandemic, and instead rewards those who purposefully are not paying rent despite having the means to do so. It could also leave tenants facing serious credit rating problems if landlords feel they have no option other than to make a money claim against them.
The situation is only going to get worse with furlough about to end. The increase in benefits does not cover the cost of average rents in any given area, and the mortgage deferral scheme only increases costs for the remainder of a mortgage. Added to that, landlords have by and large been unable to access the Government’s financial support for businesses.
The most effective way of protecting tenants is not to ban repossessions – but to ensure that they can pay the rent. There needs to be interest-free, government-guaranteed hardship loans for tenants to pay-off Covid-related arrears, similar to the system in Wales.
These would sustain tenancies and remove any risk of eviction as furlough is removed. They should be paid directly to landlords, and should cover all arrears accumulated since the start of the pandemic.
Where affected tenants either refuse to apply for a loan or where loans are not best suited to them, there needs to be direct financial support for landlords.
In addition - for what it is worth - ministers must give an absolute guarantee that possession cases will resume from September 20. Cases involving anti-social behaviour, tenants with rent arrears that have nothing to do with Covid and situations where landlords are unable to access their own home need to be prioritised.
The clock is ticking. Ministers need a plan in place within the next few weeks.
Ben Beadle is Chief Executive of the National Residential Landlords Association. It tweets @NRLAssociation.