Will Leyland, 11 September 2020
The issues facing tenants and landlords alike during this pandemic have been fairly well publicised, and in the grand scheme of an economic catastrophe (regardless how brief), probably pretty predictable.
If the economy sinks into a landslide of job losses and furlough payments it follows quite logically that tenants will struggle to pay their rent, and as such will more than likely require some form of support from the government to avoid a homelessness crisis.
The less publicised side of this argument, however, is that a pretty sizeable section of buy-to-let landlords aren’t hugely wealthy and are often small business people or small investors who use property as a pension option or a way to provide a modest income.
With this in mind, the narrative put forward of greedy property hoarders who can simply afford to foot the bill for the foreseeable is at best misguided and at worst actively making the problem worse.
There are absolutely some protections that should be in place, but it’s worth keeping in mind that many landlords simply won’t be able to afford to provide these properties if they’re expected to go income free for up to 6 months.
As reported in The Guardian, renters in England and Wales were given a reprieve last week when the ban, initially due to come to an end this weekend, was extended for a month. However, there are already warnings that the ban is masking a snowballing problem of rent arrears among those hit by the coronavirus pandemic.
This has allowed some vital breathing room for tenants, however, there are many now calling for further action to be taken by the government with potentially hundreds of thousands now in significant rental arrears thanks to either losing their jobs, being furloughed or having a partner in a similar situation.
One proposal being floated is government support to allow renters to pay arrears off over a 2 year period when the initial eviction ban has been lifted, which would mean tenants being asked to go back to paying their normal rent, paying off arrears over 24 payments with government legislation in place to make it compulsory.
Another possibility is one that the Welsh government have already put in place, a new loan scheme for tenants with rent arrears due to Coronavirus. As reported by The BBC, “The £8m Tenant Saver Loan Scheme is for private sector tenants who are not on benefits. It will not apply to those who were in significant rental arrears before March - when lockdown began.”
As it currently stands, the only measures put in place to protect landlords through this period has been the mortgage holiday introduced back in March.
Further to that, the government have encouraged a pragmatic approach towards urgent repairs and health and safety matters encouraging local authorities to be considerate when it comes to enforcement.
Landlords have warned that they are being left powerless and financially vulnerable as a result of the ban, warning that they are effectively footing the bill “for government failure”.
There is an expectation that the government may step in later in the year if the problem is exacerbated, but for the many landlords who are already struggling to collect rent owed from existing tenants, will this intervention be too late!
Will Leyland, 11 September 2020