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.
Lorraine Byron-Pitts, Property Manager at Eastons, raises concerns for her client landlords and the realistic impact of this U-turn. Although she agrees with the sentiments of David Alexander, from Apropos, that this is the right thing to do,
“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.”
She believes this is where agents will need to manage tenants to mitigate Eviction U-turn impact on Landlords and the significant arrears they will be amassing on top of the ever-increasing burden of legislation and taxation.
“This only goes to add further financial problems to landlords, many of whom rely upon rental income to get by and have no government support.”
She goes on to add that
“tenants have, thanks to upfront affordability checks and furlough pay, been supported to keep paying rent whilst landlords are barely considered by government and need as much support financially as tenants do at this moment.”
It is only through mutual support that that this sector will come through these difficult times in a fit state. Landlords need tenants and tenants need landlords and unless Government realise this, with a meaningful support package, we will see landlords leaving the industry in droves, pushing up rents and reducing available stock. This can only be bad for the tenants in the long run.
Eastons are a proud member of the Guild of Professional Estate and Letting Agents who’s compliance officer, Paul Offley, 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.
It is now ever more important that Landlord use an informed and supportive Letting agent backed up by an experienced and qualified association. It is also why it is more important than ever for Landlords to consider rent replacement insurance policies and whilst these have been removed from general sale Eastons are able to offer this to their managed landlords.
If any Landlords are interested in finding out more, please contact Lorraine.
Further information can also be found at the following sources: