Just days before it was due to lift on Monday, the Government extended the ban on evictions for a second time. Buy to Let consultant, Andy McOwat, explains the changes and what this means for landlords.
As the country went into lockdown at the end of March, the Government announced a ban on all evictions to prevent renters from becoming homeless during the pandemic. The initial three-month period was extended to five months, with the Government confirming in July that courts would resume eviction hearings from Monday 24th August.
However, just three days before the deadline, the Government announced it would be extending the ban for a further four weeks in England and Wales, with renters now protected until 20th September 2020. This U-turn comes after homelessness charity Shelter launched a campaign asking that the ban be extended to continue protecting tenants.
Furthermore, while most eviction notices pre-COVID gave tenants three months to vacate the property, in England, this has temporarily been extended to six months until at least the end of March 2021. In Wales, the six-month notice period is already in place until at least the end of September, and the Scottish Government is likely to decide on whether to introduce the six-month period until March 2021, imminently. However, it’s worth noting that this six-month rule does not include cases involving severe anti-social behaviour or domestic abuse.
As many tenants were put on the Government’s ‘furlough’ scheme and faced redundancy, advice published by health experts highlighted that homelessness or moving into overcrowded accommodation would put people at higher risk of infection. Due to these combined factors, the eviction ban was brought in to prevent those in financial difficulty from losing their homes. However, with the furlough scheme due to end in October, there are fears that this is when mass redundancies will hit, and more tenants will fall into rent arrears.
There is widely held concern amongst the landlord community that even when the courts resume, there will be a massive backlog of cases to sort through (many from before COVID-19 hit). The Housing Secretary, Robert Jenrick, has confirmed that cases with anti-social behaviour and domestic abuse issues, plus those with significant rent arrears dating from before lockdown, will be prioritised first when courts reconvene. Still, it’s likely to take a long time to work through cases meaning that landlords will have to wait even longer to repossess their properties.
The National Residential Landlord Association (NRLA) have criticised the “blanket extension [as] unacceptable”. They believe a compromise could have been reached, to at least allow for those dealing with non-COVID rent arrear issues and anti-social tenants to begin eviction proceedings in line with the original deadline. Their advice for landlords whose tenants are struggling financially due to Coronavirus is still to try and find a solution that works for both parties, be it a rent reduction or payment holiday. Landlords can still apply for a mortgage payment holiday until October, and there are other options available to help ease the financial stress at this time.
If you’re trying to prepare your buy to let portfolio for the effects of the recession, there are some things to consider in our blog ‘Recession Proofing Your Buy to Let Portfolio’. There are also a lot of useful COVID related resources on the NRLA website, here.
As always, you can speak to our expert consultants about your concerns and options during this time. Call on 0345 345 6788 or email email@example.com and they will be more than happy to help.