Evictions Ban Confirmed To End On 31st May

It’s been a long time coming. The government has finally confirmed that the evictions ban will end on 31st May, meaning that bailiffs will be able to restart evictions 1st June. The lifting of the ban is part of a raft of changes that are part of the roadmap to normality.

It has been a challenging year for landlords and this announcement is certainly something which is welcome news. So, how does this work, what will it mean for landlords and what other changes are happening at the same time?

The evictions ban originally started in March 2020, ended in September 2020, only to be reinstated in areas classified as Covid risk Tier 2 or Tier 3, was brought back in November 2020 and extended multiple times before ending this month. Due to this, landlords have basically been unable to carry out evictions for 14 months (with the latest ban lasting for six months).

Whilst there is no specific data for private renters in Medway, I have come across a report that shows some shocking statistics. This report highlights how the number of private renters in England who have fallen behind on rental payments has doubled from pre-pandemic levels of just under 5% in 2019-20 to just under 10% by the end of 2020!

When breaking down rental arrears by severity, the same report indicated that in November – December 2020, 33% were over one month behind, with 12% being two or more months behind. As a comparison, on 1st December we had 2.8% of tenants in arrears with only two being two months in arrears and the rest one month or part month.

In addition to this, I have read a shocking statistic that, of these rental arrears, 51% of private renters in the south east fell behind for the first time during COVID-19. This compares to 64% for London (the worst for the UK)!

As the country begins opening back up, I am hoping we will begin to see this trend reversing but we shall see as the clock ticks down to 21st June.

Changes To Notice Periods

Whilst for landlords who have tenants in arrears, the change to the evictions ban comes as welcome news. Those who are needing to start the evictions process however, will still experience significant delays as the courts continue to process a gigantic backlog of cases.

The good news here is that notice periods are being slowly phased back to ‘normal’ on 1st October. This first step means that from 1st June, notice periods which are currently six months will reduce to at least four months, however for the most serious cases they will remain lower:

  • Anti-social behaviour (Immediate to four weeks’ notice)
    • Domestic abuse in the social sector (two to four weeks’ notice)
    • False statement (two to four weeks’ notice)
    • Over four months of accumulated rent arrears (four weeks’ notice, expected to reduce to two weeks on 1st August)
    • Breach of immigration rules ‘Right to Rent’ (two weeks’ notice)
    • Death of a tenant (two months’ notice)

Breathing Space

Well, now we’ve got the positive news out of the way, the month of May comes with a change which could mean that, in effect, notice periods may end up being significantly longer than the reduced four months.

This is because, on 4th May, the Government’s Debt Respite Scheme (Breathing Space) comes into force. Breathing space is a period whereby landlords are not permitted to pursue any debt recovery action (including arrears related eviction proceedings) during the allocated timeframe.

Breathing space starts the day after a debtor’s details are put on the breathing spaces register by a FCA regulated debt advisor. Landlords are notified accordingly should this happen.

The period lasts up to 60 days for the standard breathing space and. In respect of the mental health breathing space, it will last as long as the mental health treatment lasts plus an additional 30 days. During this time, landlords must:

  • Stop charging any interest, fees, penalties, or charges for the debt
  • Stop any enforcement or recovery action
  • Not contact the debtor to request payment of the debt (without permission of the court)

I can see how this benefits tenants, however, certainly am concerned that there is no financial support available to help cover their rental payments during this time. With landlords unable to evict, my question would certainly be around who will be making the mortgage and maintenance payments!

Section 21 Changes

The final change relating to evictions is around the potential abolition of section 21 notices with the Queens’ speech announcement that the bill will be relaunched.

This is something which causes significant concern for the buy-to-let sector; however, I am not going to pass too much comment until we see the final proposed legislation.

I am certainly in favour of strong tenant rights; however, this definitely needs to be balanced with consideration on the side of the landlords who are often the ones picking up the bill.

I am however, encouraged to read an early report from The Lettings Industry Council that says how:

“…a “catch-all”- element, a no-fault eviction with a long-term notice should be introduced… This would give the option to end the tenancy (but providing more than double the amount of time currently given under section 21), even if no particular Section 8 reason in this individual case applies.”

We will see how this bill progresses. It was originally announced in 2019 and I am of the hope that any changes will be phased in!

Regardless of the lack of Government financial support for tenants and challenges landlords have seen, the past year has been a record breaking one in terms of house prices, rental demand and more.

Property investors tend to be resilient, agile and I am certainly very positive about the outlook. I know that industry will continue to adapt and thrive as it always has done.

Hasan

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