Buy-to-let landlords could be facing up to two years without rent due to the government’s decision to extend the evictions ban, the National Residential Landlords Association (NRLA) has calculated.
Tenants across the UK are facing months of rent arrear payments as a consequence of the existing pandemic.
Currently, tenants unable to pay their rent are protected from eviction, with the government last week announcing a four-week extension to the non-eviction period.
Despite mounting arrears, tenants are required to fulfil their rental obligations and those unable to pay at the moment will almost certainly face several months of backlogs of rental arrears payments.
The NRLA has penned a letter to the prime minister requesting that the government immediately address this unsustainable situation, especially in light of the fact that repossession cases on the grounds of rent arrears will not be treated as a priority until tenants have built over a year’s worth of rent debts.
Added to this is the six months’ notice that landlords now have to give. Where the case is disputed, even before the pandemic, courts were taking an average of nearly six months to deal with cases, with the backlog now likely to be longer.
Taking the English Housing Survey average weekly rent in the private sector of £200, this means a potential lost income for a landlord of up to two years amounting to £20,800.
The letter points out to Boris Johnson that the vast majority - 94% - of private landlords are individuals, renting out just one or two properties, and simply cannot afford to subsidise rents indefinitely.
The NRLA is warning that the government’s failure to provide any direct financial support for the sector during the pandemic means that many landlords will be forced to seek money claims against renters building arrears, and this would leave tenants’ credit scores in tatters.
The NRLA is now calling on the government to offer tenants the option of interest free, government guaranteed hardship loans to pay-off covid-related arrears. These have been introduced in Wales and will sustain tenancies and remove any risk of eviction as furlough is removed.
The NRLA also wants an absolute guarantee that there will not be a further extension of the ban on repossessions.
Ben Beadle, chief executive of the NRLA, commented: “The overwhelming majority of landlords have been working constructively with their tenants to sustain tenancies where rent arrears have built as a direct result of the pandemic.
“The government’s actions are a kick in the teeth for all these landlords who have done the right thing.
“Ministers must use the next four weeks to come up with a credible plan that pays off rent arrears built due to the pandemic and gets the courts hearing cases again.
“Stopping landlords from legally ending failed and disruptive tenancies is not a solution. The government must act to cover the costs of providing homes, they cannot expect landlords to foot the bill for their failure to support households.”