The UK government recently formally extended the mortgage repayment holidays for landlords to October 2020. There are talks in some government circles to extend the ban on tenant evictions until October of 2020.
Mortgage Holiday extension
If the Government does not opt to extend the eviction ban from 25th June, meaning tenants who are unable to pay rent during the coronavirus crisis could be at risk of eviction. Some tenants feel while their landlords have protection due to the extended mortgage holiday, it makes no sense not extending the eviction ban.
A substantial amount of possession claims waiting to be heard
A barrage of claims are set to be issued as soon as the courts can list possession claims. Although possession claims currently cannot be listed for a hearing due to the ban on evictions. Possession claims are still being issued by some lawyers and landlords during the prohibition, ready and waiting for when the courts can list them.
Mr Sasha Charles of Landlord Advice UK said: According to some of our clients, some tenants can pay, but won’t pay as they feel they can get away with not paying due to the Coronavirus. These cases are likely to hit the court as soon as the ban is lifted. Landlords and tenants should work to settle disputes including rent arrears and avoid court action. Eviction has to be the absolute last option.” he said.
Should the eviction ban be extended?
Housing Secretary Robert Jenrick said: “that while evictions will restart, judges will be instructing landlords “to reach out to [tenants], discuss their situation, and try to find an affordable repayment plan,” he said.
Pre-Action Protocol for rent arrears for private landlords is something that is actively discussed currently by the judiciary and politicians. Pre-Action Protocol for rent arrears seems to work well for social landlords and may reduce the stem of evictions if introduced in the private rented sector too.
The Government is reportedly considering plans to extend the evictions ban beyond June, though no formal announcement has been made yet.
Due to COVID-19, many families are struggling financially, although government help for most families has seen a drastic cut in their income. An increasing number of tenants will be financially challenged, the longer the Coronavirus dominates our lives.
Extra income through overtime and other sources is no longer available to some and, due to the Coronavirus, many of these households are facing financial peril.
Shelter has warned that, if evictions are allowed to restart, thousands of people could lose their homes in the middle of a pandemic.
On the flip side landlords who are unable to service their mortgages due to non-paying tenants have an option to call on the mortgage holiday. However, a mortgage holiday does not mean the lender has written off the mortgage payments for 3 or 6 months. These missing mortgage payments will still have to be paid back. This is something some tenants seem to misunderstand.
If tenants cannot afford to pay the rent, they can claim benefits which will enable them to keep paying the rent.
Dr William Masih, one of the directors of the British Landlords, said: “tenants and landlords ought to come together with compassion for each other’s predicament to resolve the rent issue without the involvement of engaging the courts if at all possible” he said.
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Author: Amanda Goldsmith
Date: 26th of May 2020