Another Friday Newsround for you. What do we have this week?
What will happen when the eviction ban ends?
The NRLA is not impressed with the government’s announcement of an extension of the enforcement of most residential repossessions until 31 March. Ben Beadle, their CEO saying
Today’s announcement does nothing to help over 800,000 private renters who have built rent arrears since lockdown measures started last year. It means debts will continue to mount to the point where they have no hope of paying them off. It will lead eventually to them having to leave their home and face serious damage to their credit scores.
The Government needs to get a grip and do something about the debt crisis renters and landlords are now facing. A package of hardship loans and grants is needed as a matter of urgency. To expect landlords and tenants simply to muddle through without further support is a strategy that has passed its sell by date.
The trouble about preventing landlords from evicting tenants for rent arrears is that if the tenants are genuinely unable to afford the rent (but are unable to move elsewhere, partly due to the eviction ban meaning that Local Authorities will not rehouse them) – the arrears just go up and up until it becomes impossible for tenants to ever clear them.
When they are finally evicted, as inevitably many will be, these tenants will struggle to find anywhere else due to the poor credit records they will have as a result of their arrears. This will probably result in a boom in demand for guarantee schemes and higher rents.
The NRLA is calling for government-guaranteed interest-free hardship loans to be made available to tenants to prevent the worst happening. Ben Beadle again:
Whilst many landlords and tenants have worked well in responding to the challenges posed by the pandemic, we are now at a crunch point. As the country follows the roadmap out of lockdown, so too emergency measures in the rental market will need to be eased.
Ministers need to ensure the tenants have the financial means to pay off rent debts built as a result of the pandemic. Without this they will have to accept the inevitable consequence of rising homelessness and damaged credit scores
Kit coming
Note that I am in the process of developing a kit to help landlords and agents source grant and other aid for tenants in arrears. If you want to be notified when it is available, sign up to our mailing list here.
Trecarrel case to be appealed to the Supreme Court
The decision in this landmark litigation, which we reported on here, is being challenged by the tenant and will now go to the Supreme Court.
According to LandlordZONE, one point to be considered in the appeal is what happens when no gas safety check was undertaken by the landlord prior to the commencement of the tenancy.
However don’t expect an answer soon as things move very slowly in the Courts – particularly at the moment!
MPs furious at Government Green Homes failures
A recent report from the all party Environmental Audit Committee, which is backed by the National Residential Landlords Association, has strongly criticised the government for its failure to tackle the problem of upgrading domestic homes, including rented properties.
For example, the government wants to increase the minimum EPC rating from E to C for new tenancies from 2025 and all existing tenancies from 2028. However, the report says that EPCs are outdated and do not support modern energy efficiency and low carbon heating. They suggest that EPCs should be replaced with Building Renovation Passports.
They also point out that the government has massively underestimated the cost to decarbonise UK homes. For example, it can cost up to £18,000 per home – far more than government estimates.
As regards the Green Homes Grant, the committee says
The Green Homes Grant, although a welcome initiative, has been laden with lengthy bureaucracy, which bizarrely has led to reports of businesses laying off staff to cover loss of income rather than creating green jobs as heralded.
They recommend that all allocated funding that has not been spent by the end of March 2021 should be rolled over and that phase two and all other schemes should all have their funding front-loaded and the schemes rolled out without delay.
You can see the report here. The conclusions on p56 start by saying:
The scale of the challenge to retrofit existing homes to tackle the climate crisis is enormous. Energy efficiency is a precursor to the transition to low carbon heat, so action must be taken in the 2020s to set homes on a decarbonisation trajectory to meet our net zero targets. The Government’s current targets for domestic energy efficiency are set for an 80 per cent reduction in emissions by 2050 and not the net zero target established in law. Yet the Government is not on track to meet even this.
Let us hope the report has the desired effect.
Residential Property is seen as a ‘safe investment’
I was interested to see this Property Industry Eye post explaining why buy to let is still popular.
Although there are many tenants in arrears due to COVID, the fact remains that private tenants have a huge incentive to pay their rent – they want to stay in their homes! It was interesting that in our recent podcast, our guest Richard Berridge pointed out that residential rents were holding up better than rents for commercial property for this reason.
Matthew Corker, operations director at Knowledge Bank, commented,
The rental market in the UK is receiving a lot of interest at the moment. Perhaps as a result of the volatility in the stock market due to the pandemic, investors are turning to what they see as a safe investment. With house prices increasing in the past year and interest in rental properties also on the increase, this trend could be set to continue.
Snippets
- Don’t forget that the new electricity regulations come into force on 1 April. Government Guidance is here.
- High streets to re-open on 12th April as part of ‘cautious’ roadmap
- First modular rented homes built at government-backed development
- 40% of households in four London boroughs claiming housing costs – report
- NRLA calls on local authorities to work with private landlords to close the adapted properties gap
- Corporations are better than buy to let landlords, says Big Issue writer
- Green London mayor hopeful pledges to help tenants buy out their landlords
- Ministry of Justice consults on increasing some court fees for landlords
Newsround will be back after Easter.