Amidst rumours over the weekend, the UK government has today confirmed an extension of the ban on the enforcement of successful eviction action by bailiffs. This now places England on a par with Scotland and Wales. While this was to be expected, there are growing concerns about the financial stability of many landlords.
What does the extension mean?
In simple terms, this means that eviction notices cannot be served for at least another six weeks – even within the narrow band of allowable actions. This is one of a number of extensions to the eviction ban, as a means of protecting tenants during these difficult times. Today’s move has prompted calls for an even longer extension, mirroring the duration of lockdown measures across England.
As it stands, eviction notices can still be served where there are excessive rent arrears, domestic violence or antisocial behaviour. However, due to the ban on enforcing eviction notices by bailiffs, these have effectively been rendered toothless for the moment. It is also worth noting that landlords have to wait at least six months before serving a notice to tenants. The definition of “extreme rent arrears” was last year extended to more than six months.
Government supporting tenants
Ben Beadle of the NRLA believes there are in excess of 800,000 private tenants currently in rent arrears. There is a slightly different opinion from the charity Shelter, quoting 445,000 across the UK. Whatever the “real” figure there is no doubt we have a huge financial problem fast approaching the private rental market.
For some reason, the UK government is unwilling to address this potentially destabilising financial crisis. While opposition parties are focused on tenants, many of whom are on the verge of losing their home, the ultimate solution must involve landlords. There is absolutely no point in handing over funds for rent arrears to tenants. These funds must surely go directly to landlords to cover growing arrears?
Desperate times prompt desperate measures
It may sound a little harsh to call for government financial assistance to bypass tenants and go straight to landlords. This is because we have seen evidence in recent weeks that funds provided by the authorities, for rent arrears, often fail to reach landlords. When you bear in mind the huge pressure on household incomes, it is understandable why some tenants may look to redirect these funds. However, this does not help landlords in any way shape or form with their financial situation, or tenant/landlord relations.
Mortgage holidays are a red herring
As we have mentioned on numerous occasions, opposition parties often point towards the mortgage holidays offered to landlords. These are optional and let’s not forget the fact that missed mortgage payments will still need to be repaid, along with additional interest. So, calls of help to clear rental arrears for tenants are growing stronger, but no financial assistance for landlords?
Landlords are the foundations of the private rental sector. When acquiring your own property, funded by your working income, there are risks. When acquiring property for the rental market, which is dependent upon rental income, the risks are often greater. The vision landlords had 10 years ago has changed dramatically, as a consequence of recent regulatory additions.
Landlords now have limited protection, tenants have increased protection, and the financial consequences are huge. It may be that the UK government will eventually have to step in and bail out those in rent arrears. If so, it makes no sense to pass these funds to tenants to then pass on to their landlords.
The idea that all landlords are “rich” is a persona created by the mainstream media over the last few years. Often used as a reason to “attack” landlords.
How long will it take the government, and critics of the private rental market, to realise that landlords are the foundations of this industry? Slowly but surely the foundations have been weakened, bricks taken away with the whole sector teetering on the brink of collapse. One thing is for sure, the bailout bill for a collapsed private rental market would be many times greater than the bailout bill required to cover existing rental arrears.
Is there nobody in UK government capable of a degree of forward thinking?
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