The government’s 3-month moratorium on evictions, included with the Coronavirus Act 2020, is set to be lifted on June 25. However, on 5 May, Housing Secretary Robert Jenrick, told the Housing Select Committee that the ban could potentially be extended, a decision which will be made next month.
Many have continued to express concerns that an extension of the eviction ban is not enough to protect vulnerable tenants who have had their livelihoods wiped out by the virus. The London Renters Union, has warned of a potential eviction and homelessness crisis that will arise if more is not done.
Consequently, housing groups have rallied together calling for law changes to grant a “rent amnesty” to help alleviate tenants’ financial burdens. The groups have also urged the government to abolish Section 21 of the Housing Act 1988, so that tenants do not have to rely on the toothless “pre-action protocol” promised by Mr Jenrick.
On 26 March, the government introduced a 3-month freeze period on evictions as part of what it called a “radical package” to protect renters. This meant that no new eviction proceedings could commence. Property Reporter stated that as a result, 25,000 eviction cases are now stuck in the system, with 10,000 of them from private landlords. However, all the legislation really does is extend the notice period from two months to three months.
Now, as Robert Jenrick suggests an extension to the ban may be granted, landlord groups such as Landlord Action have argued that it will lead to financial ruin for landlords. One disgruntled landlord, Mehmet Arkin, even launched a legal challenge against the ban, however, Sir Geoffrey Vos, Chancellor of the High Court dismissed the appeal.
Despite this kind of retaliation, the Institute for Public Policy Research’s (IPPR) report on the Coronavirus Job Retention Scheme, discovered some interesting facts. It found that 45% of the scheme’s funds (£10bn), will be spent on rent and debt repayments to landlords. As result, the organisation has argued the scheme effectively counts as an “implicit bail-out” of landlords and banks.
Further to this, at present, the Housing Minister is reportedly working with the Lord Chief Justice, drafting “pre-action protocol” for once the ban is lifted. Ultimately, this would mean that tenants would have to rely on their landlord acting “in good faith,” to find alternatives to eviction proceedings when rent is in arrears. Speaking to the Housing Select Committee, Mr Jenrick said that this would: “Enable tenants to have an added degree of protection”. However, surely tenants should not have to rest their hopes on the kindness and good nature of landlords. It is clear further legislated safeguards are required.
In response to the crisis, Labour have released a five-point plan intended to tackle the economic impact of the virus. Admittedly, the plan does contain a range of positive elements, including improving the Universal Credit System and extending the ban on evictions for six months or more. The plan also pledges to supply residential tenants with the same protection as commercial tenants and scrap Section 21.
However, where the Party falls woefully short, is in their proposal to implement a two-year pay-back period for rent-arrears. If the six-month ban goes ahead, this will leave tenants with a massive accumulation of debt. On one hand, this would be financially ruinous for tenants who would have to say goodbye to any disposable income, or worse, file for bankruptcy. On the other hand, it would be thoroughly detrimental to the wider economy. It would mean individuals do not have the funds to spend on re-emerging industries, giving the economy the boost it needs in the worst recession since the Great Depression.
In response to the Party’s five-point plan, an open letter addressed to Labour Leader Sir Keir Starmer has been written, calling for a rent freeze. Signed by 4,000 Labour members, and supported by Momentum and Open Labour, the letter accuses Labour of “failing renters” and says that it is time for “the people’s bailout”.
According to the 2017-18 English Housing Survey, on average, those who rent privately spend just over a third of their income on rent. In London, this jumps up to 70%. On top of this, 63% of private renters report having no savings and only 37% reported having some savings. Considering that a YouGov poll for the charity Shelter, found that an estimated 1.7 million private renters are likely to lose their jobs in the coming months, a rent freeze is arguably essential.
Consequently, over the weekend, The London Renters Union kick-started its “Can’t Pay? Won’t Pay!” campaign, encouraging renters to withhold rent, if they cannot afford to pay it.
On top of this call for a mass rent freeze, tenant unions say that housing laws need to be amended too. They say that only this step will ensure that homelessness “on an unprecedented scale” is prevented. Tenants Union, alongside other housing organisations, with legal aid from Greater Manchester Law Centre and Garden Court North Chambers, are now making a series of demands, including the abolition of Section 21 of the Housing Act 1988 or the “no fault” ground for evictions. This enables courts to order possession without establishing fault on part of the tenant.
Back in 2019, as part of the Conservative’s pledge to guarantee a “better deal for renters”, it claimed it was committed to abolishing this section of the Act. However, no further action has been taken.
The housing group subsequently recommends that the Rented Homes Bill should be amended to guarantee the immediate abolition of Section 21 evictions “from the date on which the Bill is passed”. To ensure further protection for private renters, it also recommends that the Housing Acts 1985 and 1988 should be amended to provide a “consistent definition of rent
‘lawfully due’” from the tenant, excluding rent arrears as a result of the pandemic.
And the urgency for this could not be greater. The housing group recently presented evidence to the Housing Select Committee, which reported that the virus has already created financial turmoil for 6 out of 10 of renters. Speaking to the Morning Star, Jason Tetley, Greater Manchester Law Centre Director, said: “Since lockdown began, we have seen from our continued contact with clients, new enquiries and front-line agencies that a crisis is approaching.The current legal protection afforded by existing legislation will not protect private tenants.”
With June fast approaching, it is clear that the government must introduce truly “radical” action, to prevent a devastating reality of thousands made homeless through no fault of their own. Meanwhile, Labour should look to its roots, and opt for policies that safeguard the vulnerable, rather than putting more money in the pockets of landlords.