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News: Why should landlords ‘subsidise those who are struggling to pay their rent’?

Fri, 11 Sep 20

The government has been slammed for attempting to shift the responsibility for renters in need onto landlords. 

Chris Town a landlord and former vice chair of the Residential Landlords Association (RLA) and Conservative Party member, wants to see the current government do more to support buy-to-let landlords. 

Town, writing for Conservative Home, said: “In July, the housing minister assured MPs that the end of the pause on possession proceedings by private landlords on 23 August would ensure that: “all people – landlords and tenants – have access to justice.”

“Instead, just two days before the ban was due to be lifted, the government U-turned, and decided that tenants and landlords should continue to be denied access to justice. In doing so, they have lost the trust of a large number of natural Conservative supporters.

“Banning repossessions has not been without its victims. By the time the courts open to hear cases on the Government’s new date of 20th September (if, this time, Ministers keep their word), it will have been six months since the original repossessions ban was introduced.

“That’s six months without landlords being able to take action against tenants committing anti-social behaviour, thus causing misery for fellow tenants or neighbours. It is six months without landlords being able to draw tenancies to an end where doing so would enable victims of domestic violence to be separated from their abusers. It is six months in which landlords have been unable to reclaim possession of their own home where they have rented it out whilst working elsewhere such as those in the military or diplomatic service.

“And it is six months in which landlords have been unable to take any action against those tenants whose rent arrears have nothing to do with Covid-19. This includes those who were building arrears prior to lockdown, and those who are deliberately not paying their rent even where they have the means to do so.” 

 

Town continued: “Although the government has now announced that landlords will be required to only give anti-social tenants four weeks’ notice of their plans to repossess a property, this does not include long, drawn-out court processes where tenants contest such notices.

This will be of no help to landlords facing rent arrears where the courts will only prioritise cases of tenants who have built debts totalling over a year of unpaid rent. Taking the Government’s average for weekly rents across England of £200, this could amount to a lost income to a landlord of over £20,000 when you take account the notice period required to a tenants the average six months for the courts to process a case from an application for repossession to it actually happening.

“It is completely unacceptable to expect landlords to undertake the responsibility of the state to subsidise those who are struggling to pay their rent. I might expect Labour to have no sympathy for landlords, but I would hope that a Conservative government would show some understanding that most landlords are not wealthy, and cannot afford to forgo rent for long periods of time.

“A massive 94% of private landlords let property as an individual, with many renting out just one or two properties as a pension or for their main income. The average gross non-rental income of landlords is £25,000 a year. About four in ten report a gross non-rental income of less than £20,000.

“The repossession ban is a sticking plaster to the fundamental problem that, unfortunately, some renters have been badly hit by the economic impact of the pandemic and can’t afford to pay their rent. This situation will only get worse with the ending of furlough. The best protection for these renters and for landlords is to enable them to pay off their rent arrears.

“This should be done through interest-free, Government-guaranteed hardship loans for tenants in England to cover Covid-related arrears. The money would be paid directly to the landlord, and the immediate future of their tenancy secured. Where tenants refuse to seek a loan, or where they might not be best suited to them, income support is needed for landlords to cover income lost as a result of coronavirus.

“Similar schemes have already been developed in Scotland and Wales meaning once again that the UK government is on the back foot, rather than taking the initiative to support renters and landlords.

“A cast-iron guarantee could then be given that the courts will open again to hear possession cases from 20th September, with priority being given to cases related to anti-social behaviour, domestic violence and rent arrears unrelated to Covid.

“The courts would operate under the rules already agreed, meaning that landlords would need to set out in their claim any relevant information about a tenant’s circumstances, including information on the effect of the pandemic. Where this information is not provided, judges would be able to adjourn proceedings with all the costs involved having to be met by the landlord.

“This would be a good incentive to ensure that they had done all they could to work with the tenant to find a solution, which is what the large majority of landlords have been doing. They deserve some recognition for this and some support where it is needed.”

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