A five-point plan to help renters cope with the economic fallout of the Covid-19 outbreak has been published by the Labour Party. The Bank of England has warned that the UK could be heading for a deep post-lockdown recession, which is likely to heavily impact tenants in the private rented sector. Last week we blogged about the Government’s response. There are plans for a protocol to help tenants in rent arrears avoid immediate eviction when the lockdown ends.
This week, as the Prime Minister announced plans to ease Covid-19 restrictions, Labour is calling on the government to go further and bring in new measures to protect tenants, proposing the existing three-month evictions ban be extended and renters are given a two-year timeframe to pay back rent arrears.
The Government has already banned evictions for three months and increased the Local Housing Allowance but Labour wants to see temporary legislation provide greater protection for renters. Its five-point plan proposes:
- Extending the evictions ban for six months or however long is needed to implement the legal changes set out below.
- Giving renters at least two years to pay back any arrears from the lockdown period.
- Giving residential tenants the same protections as commercial tenants, by not allowing them to be made bankrupt by their landlords for non-payment of rent.
- Bringing forward the government’s proposal to scrap Section 21 ‘no-fault’ evictions and outlawing evictions on the grounds of rent arrears if the arrears were accrued because of hardship caused by the coronavirus crisis.
- Speeding up and improving the provision of Universal Credit and considering a temporary increase to the Local Housing Allowance to help prevent the risk of homelessness.
The Momentum group within the Labour party wants to go further and is calling for a “people’s bailout” which would mean cancelling rent completely rather than giving tenants two years to pay arrears to landlords.
At Ringley we are happy to back any fair and workable proposals that will help tenants stay in their homes. From the beginning of lockdown, we have actively encouraged the landlords we work with to engage with tenants facing financial hardship so that arrears can be dealt with sympathetically. But to suggest that any rent owed should be simply wiped off the slate is both unfair and unreasonable, particularly now that the Chancellor has announced an extension to the Government’s Coronavirus Job Retention Scheme to help ensure people are provided for while they cannot work.
Most landlords are not faceless institutions but small business people who are simply trying to make a decent living. The majority treat their tenants well and provide them with a decent, well-maintained home to live in. This is not a free service. And tenants do not expect to be provided with a roof over their heads for nothing.
The other consideration is that many banks are granting mortgage repayment holidays of both interest and capital as easily as the government suggests they should. So any measures need to be proportionate to both parties, not one-sided. Ultimately, if the tenant is receiving furlough money – which assists the self-employed with accounts and those working – then they do have money to pay rent. Yes, there are a few who fall through the cracks in the schemes quickly put together by the government because they pay themselves dividends or have only just set up their business, but by and large, tenants do have an alternative income. So the benefit of reducing income for landlords who still need to carry out repairs as well as keep on top of their commitments should be called into question.
We hope the Government will give due consideration to Labour’s proposals but two years to repay arrears will not be needed in the majority of cases. And Momentum’s “People’s bailout” should be treated with the contempt it deserves for being unbalanced and one-sided.
Arguably it could lead to tenants taking money from both sides and worsening the burden that all taxpayers will no doubt have to fund for years and years! After all, not only is the possibility of tenant abuse when they are receiving furloughed monies too great, but the notion that rent arrears are just as easily collectible after two years as for six months is nonsense.
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