The Inquiry, launched on 17 April 2020 set out to explore how renters and rough sleepers could be protected from the impact of Coronavirus and asked for written evidence on how effective Government support had been so far and what problems still remained.
INQUIRY RECOMMENDATIONS TO GOVERNMENT FOR THE PRIVATE RENTED SECTOR:
- Bring forward legislation allowing judges to use discretion where a tenant is in rent arrears due to the Coronavirus for at least the next 12 months
- Accelerate the introduction of the Renters Reform Bill
- Set the Local Housing Allowance at a level reflecting real market rents and guarantee the rate will be maintained at the 30th percentile long-term
Legislating to prevent evictions
The Coronavirus Act 2020 introduced as emergency legislation to address the emerging pandemic prevents tenants from facing eviction during the crisis by amending the notice period for landlords seeking possession from two months to three months. The courts have also issued Practice Direction 51Z which suspended all ongoing and any new housing possession claims for 90 days until 25 June 2020. This is subject to review and may be extended.
The Inquiry sought to understand the impact of these measures and whether they remained effective. Evidence submitted by ARLA Propertymark to the Inquiry highlighted the concerns of letting agents and landlords that a backlog of cases from both before and during the virus have left landlords facing extended non-rent payments with no reasonable certainty of how to recover costs.
Meanwhile the evidence from housing authorities illustrated their fear of councils facing a “tsunami” of people presenting as in need of housing when possession claims can restart.
To address the many concerns the Government has proposed expanding the pre-action protocol used in possession claims by social landlords to the private rented sector. Such a protocol would require landlords and tenants to engage in discussion as how to resolve the situation before seeking a court order for possession.
However, evidence received by the Inquiry demonstrates that without accompanying amendments to possession legislation any such protocol would have little impact on the outcome of proceedings.
In order to prevent a sudden surge in evictions once the stay on possession cases ends, the Committee recommends the introduction of legislation, amending the 1985 and 1988 Housing Acts, allowing judges to use discretion where a tenant is in rent arrears due to the Coronavirus crisis for at least the next 12 months. The Inquiry suggests that discretion could include consideration of whether a pre-action protocol has been complied with.
To legislate for their recommendations the Inquiry has submitted to the Government a ‘Draft Coronavirus (Protection of Assured Tenants) Bill’, to be submitted to Parliament as soon as possible.
ARLA Propertymark is engaged with the Ministry of Justice to inform the development of any pre-action protocol, seeking to achieve a workable solution for members.
Abolishing Section 21
The Queen’s Speech in December 2019 already outlined the Government’s commitment to abolish the use of ‘no-fault evictions’ and re-balance the relationship between landlord and tenant by removing section 21 of the Housing Act 1988 through their proposed Renters’ Reform Bill.
John Hall, Director of Homelessness at the Ministry for Housing, Communities and Local Government informed the Inquiry that the department was “committed to bringing forward the Renters’ Reform Bill as soon as we can”, but wanted to make sure “when we do the legislative change, it is the right one”.
In order to allow the Government breathing space to achieve a Renters’ Reform Bill that meets the needs of both renters and landlords the Committee has recommended amending the Housing Act 1988 to allow judges to use discretion for coronavirus rent arrears for 12 months.
The Committee also highlights the importance of the Renters’ Reform Bill delivering longer assured shorthold tenancies.
Local Housing Allowance
From April 2020 the Government increased the Local Housing Allowance rate to the 30th percentile of local market rents for those in receipt of universal credit or housing benefit. ARLA Propertymark has long called for this level of increase and this formed part of our manifesto sent to political parties ahead of the December 2019 General Election.
The rise in the Local Housing Allowance rate was the most unifying of the Government support measures discussed by the Inquiry. With organisations representing tenants, landlords, and agents all welcoming the increase.
However, what was also made clear to the inquiry from bodies across the sector is the need for this increase to be maintained, and for a better understanding of the impacts of increasing it further. Given the unanimity of these calls, the Committee has called for the Government to guarantee that the Local Housing Allowance rate will be maintained at the 30th percentile long-term, and that work will be undertaken to understand the impact on renters and the wider rental market as a whole of raising the rate further.
Beyond the crisis
Whilst these recommendations require immediate Government action, the Committee has called for a policy solution for what to do with rent arrears that will continue to exist and build up even if tenants are protected from eviction.
Acknowledging that recent calls for rent arrears to be cancelled are undesirable, impracticable, and in the case of the private rented sector possibly illegal, the Committee recommends the Government considers alternative approaches.
The Committee will continue with this Inquiry and will be taking evidence on policy options for rent arrears over the forthcoming weeks.
ARLA Propertymark’s written evidence to the Inquiry can be read below.
Inquiry into the impact of COVID-19 (Coronavirus) on homelessness and the private rented sector
ARLA Propertymark has responded to the UK Parliament’s Housing, Communities and Local Government Committee’s (HCLG) Inquiry into the impact of Coronavirus on homelessness and the private rented sector.
