It’s been a busy start to 2021 for the lettings sector, with an eviction extension being announced until at least late February, while the Renters’ Reform Bill – which promises to scrap Section 21 and introduce lifetime deposits – is back on the political agenda
Eviction ban extended
On January 8, just a few days before the Christmas truce on evictions was due to come to an end, the government announced that the ban on bailiff-enforced evictions in England and Wales was being extended to at least February 21. It will be reviewed again at that point, but given the current situation with the pandemic, and the fact that the third lockdown is set to last until at least March 31, it seems highly likely that the ban will be extended again.
There are a few differences, though, with Housing Secretary Robert Jenrick saying landlords or agents acting on their behalf are still able to enforce possessions orders if tenants are more than six months in arrears, regardless of when the arrears have been accrued. They no longer have to pre-date Covid.
That said, the actual process of eviction will still not happen for some time. These cases will go to court, but still cannot be enforced by bailiffs, so it’s something of a blunt instrument for landlords and agents.
What’s more, there remains a huge backlog of cases to be heard, which means landlords will have to come to terms with the realisation of eviction and repossession being off the cards for quite a while yet.
There are, of course, exceptions to the ban, which still apply as before. In the relatively small number of cases where domestic violence or serious anti-social behaviour is a problem, bailiff-enforced evictions can still occur.
The UK’s biggest landlord body, the National Residential Landlords Association (NRLA), said the government was ‘doing more harm than good’ by repeatedly banning repossessions, with the association arguing that this simply stacks up more tenant debt on top of their existing arrears.
“The repossessions ban is a sticking plaster that will ultimately lead to more people losing their homes,” the NRLA’s chief executive Ben Beadle said. “Instead, the government should recognise the crisis facing many tenants and take immediate action to enable them to pay their debts as is happening in Scotland and Wales. The objective should be to sustain tenancies in the long term and not just the short term.”
Steps taken to prevent evictions
The Ministry of Housing, Communities and Local Government, when announcing the ban extension, also revealed in a statement that it was launching a new mediation pilot to further support landlords and tenants who face court procedures and potential evictions from February.
The statement said the pilot will offer mediation as part of the possession process to ‘try and help landlords and tenants to reach a mutual agreement and keep people in their homes’.
The statement added: “Helping to resolve disputes through mediation will enable courts to prioritise urgent cases, supporting landlords and tenants to resolve issues quickly without the need for a formal hearing. The mediation pilot will work within the existing court arrangements in England and Wales.”
Mark Hayward, Propertymark’s chief policy adviser, said: “Although the new mediation pilot will help it is important to take steps back towards normality so that both landlords and tenants have access to the justice system, while putting measures in place to offer further support to tenants who have built up Covid-related arrears through no fault of their own.”
New breathing space law
Evictions will also become much harder as a result of the government’s new Debt Respite Scheme – also known as Breathing Space – which is set to come into force in May.
It will provide someone in ‘problem debt’ with the right to legal protections from being chased up by creditors. As this applies to the rental sector, too, it is likely to protect tenants from being chased up by landlords or their letting agents.
There are two types of breathing space - a standard breathing space and a mental health crisis breathing space – according to the government guidance.
A standard breathing space is available to any individual with problem debt and gives them legal protections from creditor action for up to 60 days. The government guidance adds: “The protections include pausing most enforcement action and contact from creditors and freezing most interest and charges on their debts.”
This standard breathing space – which the government insists is not a payment holiday – can only be accessed through an approved debt adviser registered with the Financial Conduct Authority, or via a local authority if the authority is approved to offer this kind of advice to its residents. The space can be applied for no more than once a year.
Meanwhile, a mental health crisis breathing space is only available to a client who is receiving recognised mental health crisis treatment.
If a client is certified as being in mental health crisis treatment by an approved mental health professional, the client or someone else might ask for a mental health crisis breathing space on the client’s behalf.
Stronger protections are offered by the mental health crisis breathing space than the standard breathing space, as it lasts as long as the client’s mental health crisis treatment, plus 30 extra days afterwards, no matter how long the crisis treatment lasts.
You can find out more here.
Renters’ Reform Bill back on the agenda
The Renters’ Reform Bill – while seemingly inevitable at some point, with broad cross-party and public support – seemed quite far off with so much other business for Parliament to work through, especially regarding Brexit and coronavirus.
Housing Minister Christopher Pincher had said in September last year that the Bill would be introduced at ‘the appropriate time when there is a sensible and stable economic and social terrain on which to do it’.
Despite this sensible and stable economic and social terrain not being in place – with the virus still rampant, the country in lockdown and the economy in recession – it was recently revealed by a junior housing minister that the Bill would be introduced ‘very soon’.
Kelly Tolhurst, who a few days later resigned from the government for personal reasons, said that the controversial Renters’ Reform Bill would be implemented very shortly.
It’s the Bill which includes measures to abolish Section 21, as well as introducing lifetime deposits which can ‘shift’ from one property to another, negating the need for tenants to find brand new deposits each time they move.
In a Commons debate, Tolhurst made the surprising announcement when answering a question about what steps were being taken to ensure the security of tenants in the private rented sector.
“The government are committed to enhancing renters’ security by abolishing no-fault evictions. During the Covid-19 pandemic, our collective efforts have been focused on protecting people during the outbreak. This has included introducing longer notice periods and preventing evictions at the height of the pandemic on public health grounds. We will introduce a renters’ reform Bill very soon,” she said.
The scrapping of Section 21 has been on the cards for some time, but it was the Renters’ Reform Bill – which first appeared in the Conservative 2019 manifesto and was also included in the Queen’s Speech, with the pledge that it would made law during 2020 – that really made it reality.
But 2020 was dominated by Brexit, coronavirus and then latterly Brexit again, which meant there was no time for the Bill to be introduced. It was one of many proposed pieces of legislation to have been pushed back as the response to Covid-19 and Brexit took precedence.
It still seems unlikely that the Renters’ Reform Bill will be absolutely top priority for some time yet – with the battle against Covid and the vaccine rollout currently taking priority, as well as many issues surrounding Brexit. However, when things calm down again – probably in the late spring and early summer – we could finally see the Bill introduced. Even then, it’ll take some time to go through the two Houses, so there doesn’t seem to be an imminent threat of the Bill passing just yet.
Here at Balgores Property Group, we can help to manage your tenancies in the best possible way and get the most from your rental properties as a result. We operate in Essex, East London and parts of Kent.
If you would like further guidance on any part of the lettings process, get in touch with our expert team today. You can also get a free and instant online valuation to see how much rent you could charging in the current marketplace.