End of evictions ban delayed – but what will happen when furlough ends?

Another extension to the evictions ban – but the government now needs some fresh ideas.

On Friday, as many suspected it would, the Government extended the evictions ban until 20 September. So another month will pass during which possessions cases cannot be processed by the courts. A short stay of execution for renters in financial difficulty and more pain for property owners facing arrears. Landlords now need to give six months’notice of eviction to tenants and the Government says it “will continue to work with the judiciary and stakeholders to ensure that the courts are prepared for eviction cases to be heard safely” once the ban is finally lifted.

This latest extension takes us comfortably into the next session of Parliament, which sits again from 1 September. We hope there can then be proper and urgent debate around ways to support both renters and landlords, who are equally compromised by the current situation.

What is even more worrying, is what will happen when furlough ends in October. Will there be yet another U-turn? Or an extended scheme for certain parts of the economy such as hospitality and the arts, which continue to suffer from severe economic problems? If not, we will be facing another, more extreme cliff edge as companies have to make difficult decisions about bringing staff back to work – or not.

According to the Office for Budget Responsibility, up to 20% of furloughed workers could become unemployed when the scheme ends on 31 October. This has huge implications for landlords as the Joseph Rowntree Foundation calculates that 1.5million private renters are being paid by the state and up to 300,000 risk losing their jobs when employers have to start paying wages again.

Over the weekend the Telegraph identified the parts of the country where landlords are most  of risk of finding their tenants unemployed and potentially in rent arrears. Areas with a strong emphasis on manufacturing are likely to be hard hit, as well as those places where tourism accounts for large numbers of jobs. Read the full article here https://apple.news/A7KDwVVQyTgWChg-03OEWow

In the meantime, a £500 million Hardship Fund will provide council tax relief to vulnerable people and households to help those affected most by Coronavirus and Universal Credit and Housing Benefit have increased. Local Housing Allowance rates will now pay for at least 30% of market rents in each area. But for many that will not be enough and landlords will be expected, once again, to take up the slack.

Let’s hope the government has something inventive up its sleeve for the next session of Parliament to provide a safety net for those on both sides of the rental equation who find themselves in financial difficulty. We anticipate that some fresh inspiration will be badly needed.

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