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Eviction ban extension could leave landlords facing two years without rent

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.”

Poll: Are any of your tenants facing months of rent arrear payments?

PLACE YOUR VOTE BELOW

  • icon

    It would seem most tenants are paying, those that won't pay may well have a free ride for now, but at some point they will be evicted complete with a CCJ to their name, at that point no decent landlord with decent properties will touch them, then they will whinge about how unfair the system is.

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    The longer this goes on and the longer the judiciary takes to resolve this mess, the more LL will be extra cautious AND put prices up, as another form of protection against lack of income.

    For sure in future my contracts will be brutal in requirements along with my 15% extra whatever additional rules are piled on by Govt. AND Local Authorities.

    And that will be added as and when new rules and costs are imposed, and even if the rules say that is not allowed, then it will mean that the next tenants will have it added in the contract, which is effectively a rent increase, on top of inflation.

    And that is just what the Government don't want!

    They are however, bringing it on themselves and on tenants. For me, I just see it as extra income, for little extra work,

    Just how dim can they get?

     
  • icon

    These measures will only harm the people they are trying too protect in the long run . You can't house people for nothing whilst putting more legislation through like electrical safety etc. LL'S will simply sell up .
    I'm experiencing 2 tenants not paying and believe me this will be the norm whilst the government are protecting and to some extent encouraging tenants to default .
    If for instance you have properties in the London borough of Islington I heard the authorities are going too ignore all evictions orders for the foreseeable future !!! How true that is I'm not sure but worrying times .

  • Amanda Burrow

    I have a teanant already 14 months in arrears I was in court Twice due to his lies and finally was granted my property back ! Then Covid Happened prior to my bailiffs letter , so yes 2 years of arrears ! Whose helping me U credit have not replied to 7 requested of direct payment requests now !
    Surely the government should be refunding landlords non payment as they are the ones making these rules !
    Any help appreciated ,

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    its always best to get the tenant to provide an Experian report. That way you will have a clear picture of who you are dealing with. Also consider getting relief to go to the high court when this is over. it costs but you get your property back.

     
  • icon

    I now only accept tenants who can provide a guarantor who has liquidity, usually parents,

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    That's going to be the way forward now, who's going to rent to those that cannot provide a suitable guarantor ? it will be a big problem for government and councils next year when the wholesale evictions kick off.

     
  • icon

    One month's late rent = tenants problem
    24 months' late rent = landlord's problem

    what is the % chance of collection ?.. Arbitration will give a 50% discount to achieve an amicable solution ?

    Paul Barrett

    Nah a CCJ will be for all the rent arrears.
    No tenant will agree to pay half when they can avoid all.

    But it will follow them for the rest of their life or rather for as long as a LL renews one every 6 years.

    For many tenants it would be better to pay the rent.

    Just one CCJ can prevent even obtaining a mobile phone contract.
    I doubt many tenants will want their lives controlled by a LL CCJ from 20 years ago.

    Once it is on the Registry Trust and is continually renewed every 6 years that CCJ stays on the Register.

     
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    It's not all about the money Seb,



























    £60 money claim online, a CCJ to follow that non paying tenant around for at least 6 yrs, worth every penny, revenge is sweet !




    3

     
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    "Just one CCJ can prevent even obtaining a mobile phone contract."

    Yeah but smoking kills... doesn't it ?

     
  • icon

    Totally agree........And I still have a CCJ on 2 rogue tenants...They are both now in their 2nd CCJ.....I am sure they find it an issue...And each one only owes me about £600.00...yet still they will not pay to get the CCJ removed!

    Probably though, they find ways round to get their mobiles, rental contracts, etc etc....But for sure, there will certainly be a day of retribution that they will surely regret.

    And of course each renewal of the CCJ, the figure goes up..

    I will NEVER give up....It is a basic principle for me. I have rather an aggression for people who steal and cheat from me.

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    Given that the CCJ debt goes up each time, it more than covers my £60 each time, so I will eventually, make more money than my costs!

    Works for me every 6 years and only takes me about 30 minutes.

    Long may it last.

     
  • icon

    What chance have we got there is no shortage of housing. I have property vacant & can't find Tenants yet we have a London Radio Station continuing to keep burping about shortage, even last night a full hour of nonsense egged on by the presenter that think he knows all, talk over everyone, people phoning-in agreeing with him, they are very good at talking but that's their limit.
    There a 52 acre site in Acton with new Flats mainly, which is under construction for years and phased selling as they go but it was well finished before Corona and still 40% unsold imagine that, they have all this Government support, free loans, help to buy / no SDLT etc corrupting the market, still can't shift them, never mind keep Building although you can't sell what you have, its the sheep going through the hole in the wire Syndrome.

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    thousands of part buy part rent are empty but more are being built

     
  • icon

    The root of the problem is that rental costs have outstripped what the market can really afford. Tenants take on a properties they cannot afford and then fall into arrears. They get evicted and left with CCJ's. The owner is out of pocket. No one wins. The average return on property is a lot lower than the headline numbers. Scaling back rental prices will lead to a more stable and healthier market.

    Paul Barrett

    Not possible to scale back rental costs.
    They are what they are due to market forces like

    MASS UNCONTROLLED IMMIGRATION

    S24 TAXES

    Insufficient housebuilding

    Stupid licencing regulations

    Cost of deposits

    Etc etc etc.

     
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    Paul, fair points but this is similar to the Laffer curve conundrum. Above a certain level, the higher the asking price, the less income is made (on average).

     
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    Government and councils are the root cause of high rents, increase our costs and the end user pays, that is true whatever the business.

     
  • Paul Barrett

    It all depends on whether tenants are prepared to pay more for where they want to rent and to give up on discretionary spend.
    Trouble is snowflakes want it all NOW.

    Rarely is this possible.
    There is no sense of realism with GR.
    But in the main there will always be those who can afford the rents required to sustain rental properties.

    It will just mean LL have to remove those who can no longer afford the rent..............not so easy to do!

    But it will be interesting to see what happens in light of the millions soon to be unemployed.

    Never has there been such a collapse in jobs since the Depression

    So I guess really nobody knows what will occur.

    We can all conjecture til the cows come hone!

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    Conjecture - an opinion or conclusion formed on the basis of incomplete information.

    The key word being... incomplete.

    BTW, has anyone successfully registered a CCJ since the beginning of COVID-19... anyone ?.. anyone ?.. Bueller ?

     
  • icon

    I don't understand all this about un-affordable rent or why government is deliberately creating arrears with guaranteed 6 months extra stay whether you pay or not and they are not.
    I have a 5 bed house vacant licensed for 7 previously let for £2'200 pm. I was unable to continue because of all the noise, loud music, drinking & complaints probably because they had cheap rent. So £2'200 x 12 = £26'400 pa divided by 7 persons = £3'771. ea, pa, divided by 365 days = £10.33 per day, the London living rate is £10.75 per hour I think, so not even one hour per day to pay the rent. I believe they had it cheaper than this because of so called guests that Regulators made LL's powerless to do anything about. The Media wants people to believe that half their wages goes on rent ??

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    There will always be someone who knows the exception to the rule, and then assumes that the one exception automatically applies to the rest of the world ?

    What do you think the rent on a 5 bed house would be worth in Islington, London ?

    Maybe you don't want to live in Islington, London so it's not relevant ?

     
  • icon

    5 bed in Islington?
    Gotta be £3,800 to £5000?

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    In an ideal world, you would have a single family but the reality is usually somewhat different - an occupancy for each bedroom ?.. and who can't afford £750 - £1,000 a month to live in a 5 bedroom house in Islington ?

    And then it all becomes a little anti-social... and all because it's 'probably' too cheap ?

     
  • Paul Barrett

    6 lodgers plus a live in LL.
    No problems removing rent defaulting lodgers.
    LL stays at property minimum of 1 day per month.
    Rent paid in cash.
    How will anyone know how much lodgers are paying which funnily enough will never be more than £7500 per tax year!?
    Prove otherwise!
    With a 5 bed house in Islington I'd have 4 single unrelated lodgers each paying at least £700pcm.
    Spare room is LL to live in once per month.
    LL will keep his room locked when he isn't occupying.

    Only real issue is the live-in LL must supply all the usual domestic requirements as it is the LL home; one of possibly many!

    That means LL supplies toilet rolls.
    The point of being a lodger is that you are living in a home.
    That home should have normal supplies.

    However I DON'T believe this extends to washing powder.
    Though quite frankly it would be a minor cost to keep lodgers stocked with toilet rolls and washing powder plus normal domestic cleaning items.
    If I was a lodger LL staying at one of many homes once per month I would probably have a cleaner in once per week as well.
    Just factor in what is achievable with lodgers.
    The main one being eviction is easy.
    Whatever notice was agreed when completing the individual lodger agreement.

    Lodgers are the way to avoid being bankrupted by feckless TENANTS.
    The only bugbear being the LL should occupy possibly one of his many homes to comply with resi home insurance policies.
    I believe insurers need to notified if an OO intends to be absent for more than 31 days.

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    Clearly, you speak with experience Paul but I still wonder who would want to live under such conditions - those fresh out of uni and that's about it ?

    Of course, if you've ever spent time in the forces or the clink then what you're suggesting would be a paradise !

     
  • icon

    Seb' don't know why the disparity or can't see any reason why Islington should be so much more expensive or any different to where my House is in Ealing (the Queen of the Boroughs) not much to choose between the two to my mind and I used to live in N4 & N8. North L'don v West Lon'don not much in it. I have no doubt my example is not the exception but rather common place, perhaps the Islington scenario is the exception instead of the norm, incidentally mine is modern, built by me in my younger day's, newly refurbished, fully furnished 5 doubles' 2 bath rooms very large lounge / living room, garden, off street parking, central location for half of your Islington price, give us a break.

  • Paul Barrett

    @seb

    If you look at the spareroom website you will find there is a massive demand for rooms.

    There are plenty of unrelated singles who want a room.

    It may not be a desired way of living but multi-occupancy for many is the only way they can afford to live in expensive areas.

    To avoid punishing tenant legislation LL will convert to being lodger LL providing 'digs' as my mother called them.

    No law requires a lodger LL to be in occupation every day in a month.

    However there is nothing to prevent a LIVE-IN LL from having a 'friend' staying with him who may help out in the house.
    As long as the LL is there once per month that will satisfy residential insurance conditions.

    The only problem for many LL is to afford an unencumbered resi property or one on a resi mortgage.
    Obviously affordability for multiple resi mortgages is a problem.
    This is why most LL would need to sell existing BTL to come up with the monies for unencumbered resi properties to use for the lodger strategy.

    Doing that incurs large CGT bills scheduled to become even larger if the MSM is to be believed!

    Many LL will prefer to risk tenants than take the CGT hit for selling.

    That will be their business choice.

  • icon

    They'll shoot themselves in the foot again, wasted Billions on Furlough unnecessarily badly thought out and panic, giving huge sums to Companies & individuals alike, some didn't need it, others milked it, some couldn't believe how much they got sometimes for nothing, others took it & ran so they won't be opening their business again. The same eat out mismanagement more billions wasted supposedly to help the recover business, how silly, I was in a participating restaurant and got charged full on the Wednesday when it should be half. I paid & said nothing because I was in company & paying didn't want to make seen. So I expect them to collect another 50% for Gov' for nothing and how many others doing it or just keep clicking the till roll, its a gift designed for extortion. 2 Trillion in debt all of a sudden now want us to pay more taxes for their cock-ups and cripple what business is left. They are eyeing up CGT for a hike to 40%, no inflation relief, indexation or taper another silly idea obviously will not work, people can't sell and take a hit like that, this will stall the market completely, they'll have to wait until we die. Wrong people in charge Mr Hammond knew better than his successors but Premier sacked Government so what can we expect.

    icon

    I see how many problems you've identified... what I don't see are any alternatives or solutions - something highly indicative of the Lab/Lib/SNP coalition ?

    EDIT: saying we need something better is not the answer

     
  • Paul Barrett

    @seb

    The answer is easy.

    Just add the debt to the National Debt and allow future generations over the next hundred years or so to pay down the debt.

    That is how the War debt was paid off.
    Regard the CV19 as a sort of War where Govt had to spend.

    The generations suffering now DON'T need to be made to suffer more for the costs of survival.

    Far better to lower welfare and taxes and have the economy grow.

    If asset wealth is attacked by penal taxation then such assets won't be built up in the UK.
    That wouldn't be beneficial for UK economic development at all.
    Govt must resist the temptation to tax nore.
    It needs to tax less while borrowing is so cheap.

    Lets face it there are trillions of exchange looking for a safe and secure home.
    The British Govt hasn't ever defaulted on debt.

    That gives supreme confidence to lenders that the Govt will always honour their debts.

    icon

    I had to check myself... I'm all for paying off the debt from the War - those amazing people did everything to protect our freedom, no price too high.

    Is it the same for COVID-19 ???.. well, it depends how much you love the United Kingdom ?

     
  • Paul Barrett

    Yes Seb it is the same.
    Govt had to spend a load of money they didn't have for National survival.
    Can you imagine what would have happened without the response of the Govt!?

    icon

    I didn't vote for Boris but it feels damn good to finally hear someone getting behind the democratically elected Gov't and saying, "let's make this happen !"

     
  • Paul Barrett

    Seb
    The issues have been with feckless Labour Govts.
    Unfortunately due to the old

    Events dear boy

    the Tories have needed to embark on massive borrowing.

    This is an emergency and wouldn't be appropriate in normal times.
    Labour would have borrowed without any emergency imperative.

    So little alternative than for the Tories to behave like an extreme version of Labour.
    As an example I believe the railways will need to be nationalised.
    There simply won't be the traffic anymore with WFH etc

    Massive subsidies will be required to provide a vitally needed rail system.

    Things are gonna be somewhat different in the UK for some time to come!

    icon

    no emergency--just a wef mandated scam

     
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