Funding package vital to keep tenants in homes

NRLA CEO Ben Beadle reflects on the reopening of the courts and the next steps when it comes to securing a financial support package for the PRS.

The courts finally reopened their doors to hear repossession cases this week following extensive lobbying by NRLA – as figures revealed almost a quarter of private landlords in England have lost rental income as a result of Covid-19.

Private landlords have lost up to £437m so far as a result of the pandemic according to an analysis by the NRLA of research it commissioned YouGov to undertake.

And while many landlords have managed to come to arrangement with their tenants where there have been difficulties, offering deferrals, rent reductions and even rent breaks, the situation is not sustainable long term.

When furlough ends many more tenants could lose their jobs and consequently struggle to pay their rent, even with the extra support from the Government’s Job Support Scheme announced yesterday. 

With the YouGov figures showing that 61% of landlords surveyed rent out just one property, and 34% are retired, it is clear the vast majority of us are not the property tycoons the media would have people believe.

The idea that landlords can absorb such losses to their income long term is absurd and could potentially lead to an exodus from the market that could have a catastrophic impact.

It is with this in mind that we are now ramping up our campaign for a financial support package for the sector.

We want the Government to follow the lead of Scotland and Wales and offer low cost, or interest free loans to tenants, which would be paid directly to the landlord to cover rent and arrears.

These could then be paid off by the tenant over a period of several years.

This would not only give tenants peace of mind that they could remain in their home, it could also slash the number of repossessions cases going to court.

Many landlords who may be considering court action, will be doing so because their tenant can no longer pay the rent, leaving them with little or no income. A loan system would solve this issue, essentially solving the problem without the need to go to court.

For those that do need to take cases to court, we have created a resource for members including information about responsible repossessions, reactivating existing proceedings and enforcing orders, which can be accessed here.

Co-operation

I sat on the judicial working group set up to safely reopen the courts – and while some of you may think the new system doesn’t offer enough for landlords, this is something we can work to change.

The focus up to now has been getting the legal process up and running again – and getting landlords access to justice.

The issue of court reform has been on the table for some time  now – and there can be no doubt that a better and more proportionate way of resolving housing disputes is needed now more than ever.

The news that extra Nightingale Courts will be established to deal with the backlog of cases is welcome as is the announcement of the additional 200 Deputy District Judges and Property Tribunal Judges assembled to assist.

Wins

We have seen other successes. I am pleased the Government did not bow to pressure to rush through the abolition of Section 21 in response to the pandemic, before a functioning alternative was put in place. The Housing Minister has made clear that the planned Renters’ Reform Bill will be brought forward “when there is a sensible and stable economic and social terrain on which to do it.”

Our ‘golden rules’ –  nine steps to be followed by landlords when it comes to working with their tenant to avoid court - have been approved by the Government and included in official guidance.

And we also persuaded the Government to prioritise cases in which tenants are behaving anti-socially, are violent or have built up significant arrears pre-Covid, although we would like to see the level of arrears for priority treatment lowered.

In the Commons this week housing minister Christopher Pincher told MPs that landlords ‘on the whole’ are doing the right thing and said the Government is aware landlords rely on rental income to pay their own bills – which is why possession hearings over high levels of arrears will be prioritised. 

He did not rule out providing funding for tenants when quizzed on the NRLA loans plan by Conservative MP Craig Whittaker and said policies are ‘continually under review’.

What happens next?

Given the six-month backlog, experts are already predicting it could take 12-18 months for repossession cases to come to court. There is also the risk of adjournment if the judge feels landlords have not offered their tenants sufficient support.

With this in mind I would encourage landlords to speak to their tenants, use mediation if necessary but do everything they can to keep good tenants in their homes and out of court.

Should you have no option but to go through the courts to regain possession, then do follow the NRLA’s golden rules closely.

If you can prove to a court that you have done everything possible to work with your tenant and sustain the tenancy then your case has a stronger chance of proceeding without adjournment.

We, for our part, will continue to lobby Government for a financial support package to help landlords and tenants through these challenging time.

Other industries have benefitted from Government support and we believe it is high time this was extended to landlords providing the vital rental homes this country needs.

More information

You can show your support by writing to your MP to back our campaign. 

For more information on the new court process as cases begin to be heard once more visit our dedicated webpages here.

You can read more on our campaigns to reopen the courts here in this month’s Bulletin and read more about landlord and NHS nurse Kelly left homeless due to the evictions ban.