Another Friday – what do we have for you?
Fears of a surge of evictions in July
New research published yesterday by the independent Joseph Rowntree Foundation (JRF) shows that 37% of furloughed private renters are worried about being able to pay their rent when the coronavirus lockdown ends.
The research was based on a sample of 1,031 private renters in a YouGov survey of 6,430 UK adults.
Despite changes to the Coronavirus Job Retention Scheme announced last week seek, it still looks as if many people will lose their jobs. Meaning large numbers of people could need to rely on the social security system for support with their housing costs for the first time.
This will in many cases be inadequate to cover fully their current rent leaving them exposed to financial problems and – if they fall into arrears – eviction. The shortfall varies across the country and in some Central London boroughs could be as much as £1,715 a month.
JRF is calling for an increase in LHA to cover median rents in all areas, as well as the removal of the national cap on the amount of LHA that can be paid, so that it does not limit support in high-cost areas.
Commenting on the survey findings, Darren Baxter, Policy & Partnerships Manager at the Joseph Rowntree Foundation said:
Renters are really worried about not being able to pay the rent, both right now and in the future when the lockdown ends, particularly those who’ve been furloughed.
The furlough scheme has been a lifeline during the pandemic, but it will not save every job, and many private renters who are let go by their employer will need to turn to the social security system for help with housing costs.
The government has temporarily increased housing benefit levels to the lowest third of local rents, but this still falls well short of what is needed for the typical renter to pay their rent.
As a country we believe in looking after each other when times get tough.
To achieve this the government should increase Local Housing Allowance rates to cover median local rents, and lift the national cap so that renters in all areas of the country will get the lifeline they need to stay afloat and keep their homes.
Extending the moratorium on evictions?
The other proposal is that the courts extend the current moratorium on evictions allowing tenants who are unable to pay their rent through no fault of their own, to stay in their homes, and increasing pressure is being put on the government to make a decision on this.
The government is currently working on a ‘pre-action protocol’ to force landlords to try to agree to a repayment program rather than evict, but it is feared that it will not have sufficient teeth to prevent large scale evictions.
The London Renters’ Union (LRU), which represents 3,000 tenants in London, has called for an extension to the eviction ban. Dan Wilson-Craw, of the campaign group Generation Rent, said:
Given the scale of the economic crisis and the gaps in the safety net, we’re expecting hundreds of thousands of renters to be in arrears now and as things stand they face eviction from the end of this month.
And Bell Ribeiro-Addy, Labour MP for Streatham has said:
We can’t leave tenants to rely on the charity and goodwill of their landlords. We need binding legislation and stronger financial support to make sure people aren’t left facing homelessness or bankruptcy.
On the other hand, the National Federation of Landlords denies that the problem is as large as is being claimed. They are undertaking their own research which will be published soon. For example, it seems that leading lettings agency Belvoir found that only 3% of its tenants had fallen behind with their rent.
The NRLA has pointed out in the past that continuing the moratorium will not only be unfair on landlords who will be forced to continue renting to tenants while receiving no income (and while continuing to be liable for their own expenses) but that it will also be unfair on everyone forced to live with or near anti-social tenants.
We await the government’s decision.
A new Ombudsman at TPO
The Property Ombudsman has announced that Rebecca Marsh will take up the role of Ombudsman at The Property Ombudsman after Katrine Sporle CBE’s five-year contract comes to an end on 31st October.
You can see a nice picture of her on Property Industry Eye.
Marsh has an impressive pedigree having been formerly at the Legal Ombudsman, Parliamentary and Health Service Ombudsman and Independent Police Complaints Commission.
Tenant fee ban for pre-June 2019 tenancies goes live
Note that the Tenant Fees ban in England now applies to all tenancies, not just tenancies which were created after 1 June. Any fees clauses in tenancy agreements will be invalid and if you charge those fees, penalties will apply.
The only situation where you will not need to make a refund is if you have taken, in respect of a pre-June 2019 tenancy, a deposit of over 5 weeks rent. This does not need to be refunded until such time as the tenancy is renewed.
Tenants need to be vigilant and know their rights as it looks as if some agents are still charging illegal fees. Including check-out fees, deposits of more than five weeks’ rent and excessive charges to replace lost keys.
NB If you are a tenant and this happens to you, you can report the agent to their Property Redress Scheme or Trading Standards and claim the fees back via the First Tier Tribunal. It will also mean that your landlord cannot use section 21 to evict you (when evictions come back as they eventually will).
New Electricity Regulations
We have known about these for a while but they are now in force and will apply to all new tenancies after 1 July.
Landlords associations had urged government to delay this as the pandemic makes it more difficult for works to be done, but it seems that their pleas have fallen on deaf ears.
You can read more about this in our post here.
What happens to deposits when landlords reduce or waive a tenant’s rent?
The government has confirmed that landlords who offer tenants a lower rent or a rent holiday during the Coronavirus crisis will not have to return the relevant portion of the tenant’s existing deposit.
Sean Hooker, Head of Redress at The PRS, warns landlords to ensure they keep a clear record of what’s been agreed when negotiating and that it’s understood how long the agreement will last.
Tenant and landlord need to agree what happens after the rent reduction period is over including whether the tenant is expected to repay the unpaid rent via a higher rent afterwards, or whether the outstanding rent is waived.
Once clear documentation has been established, then on that basis the deposit can be retained at its original level, and a landlord or letting agent will be in accordance with the Tenant Fees Act.
- OPEN LETTER: Agents are not only putting themselves at risk, they are also putting their staff at risk
- Judges rule housing possession moratorium includes appeals
- HMO first: Coventry landlord to pay back £11,000 rent to tenants in unlicensed property
- Minister dashes hopes that new Universal Credit system will see direct rent payments for all landlords
- Flexibility for furloughed workers to come back part-time will start in July
- After a six-month Coronavirus delay the UK’s largest landlord show is to finally go ahead in September
- FCA issues update on progress towards Business Interruption Insurance test case
Newsround will be back next week.