Residential landlords in particular will be concerned about the ongoing effect of tenants who are unable to make rent payments due to the impact of COVID-19.
Where possession proceedings are necessary and possession orders are obtained, enforcing such orders may prove difficult due to the extended ban on evictions until 31 March 2021. At the time of writing, with circumstances as they are, there is every possibility of further extension.
However, there are limited exceptions to the current eviction ban which include possession proceedings that are unconnected to payment of rent e.g. if the tenant is causing a nuisance, or where a tenant has in excess of 6 months’ rent arrears.
While of course no reasonable landlord would want to leave a vulnerable tenant without a home, many will be concerned about covering their mortgages and also about how they can protect their properties from the minority of tenants who display anti-social and damaging behaviour.
Earlier in 2020, Housing Secretary Robert Jenrick MP acknowledged that: “We are in extraordinary times and renters and landlords alike are worried about paying their rent and mortgage.”
“The last thing anyone needs to worry about at a time like this is losing their home.
“The government is clear – no renter who has lost income to coronavirus will be forced out of their home, nor will any landlord be left with unmanageable debts.
“These changes will protect both renters and landlords ensuring everyone gets the support they need.”
Also, following the announcement of the first lockdown, the Chancellor of the Exchequer, pledged payment holidays for landlords with buy-to-let mortgages amongst a package of measures introduced in response to the coronavirus pandemic.
This initially permitted payment holidays, for up to three months, offered on the understanding that the benefit would be passed on to the tenant.
Therefore the announcement around suspending evictions for the initial three month period went hand in hand with these earlier measures; the idea being that at the end of the three months, landlords and tenants were expected to work together to establish an affordable repayment plan, taking into account the tenant’s individual circumstances.
Due to the ongoing impact of the coronavirus pandemic, it is perhaps unsurprising that further measures have been implemented. In the interests of striking a balance for landlords and tenants, the Financial Conduct Authority have announced a mortgage payment holiday extension, permitting landlords the right to request a payment break of up to six months. This equally applies to landlords who have already made use of the initial three month payment break.
There remain concerns that suspending evictions is merely pushing the issue further down the road, with a raft of problems due to appear once the eviction ban is lifted.
Whilst the measures proposed by the government will come as a relief to tenants and the fact that the measures for mortgage holidays will also be extended to six months, including for those with Buy to Let mortgages, this approach risks storing up trouble when this crisis is over because the interests of the tenant, the landlord and the lender will conflict at that time.
It remains to be seen what the long-term implications are for Landlords, but if you have any questions, an expert from our property team will be happy to help.