Ros Altmann: What Ministers should do to ease the plight of small landlords

7 Jul

Baroness Altmann is a Conservative peer.

Around eleven million people in England live in private rented housing.  Covid-19 has caused considerable anxiety for many tenants who fear its impact on their finances and their ability to keep up rent payments for their current home.

I welcome the policies that stopped tenants being made homeless during the emergency lockdown. The Government rightly decided to suspend evictions in the rental market for a period of three months to provide security to tenants and to ensure that the lockdown worked, backed by a financial package of support for tenants who were struggling to continue paying their rent. This included the furlough scheme and increases to the Local Housing Allowance and Universal Credit.

The Government recently decided to extend the ban on evictions by a further two months, pending the outcome of a judge-led working group that is looking at how to protect those most at risk from Covid-19, while also ensuring landlords can regain possession of their properties in legitimate circumstances.

All these steps are welcome, and have contributed to the vast majority of tenants (90 per cent according to the National Residential Landlords Association (NRLA)) being able to pay their rent as normal. It has given tenants a breathing space during this unprecedented national lockdown. But a blanket ban on all evictions is not without its victims.

After so many months, I do wonder whether the Conservatives need to do more to show support for some of the landlords (especially small ones who own only one or two properties).

Many may have been relying on rental income for their retirement or other purposes and are struggling to pay their own bills, while their tenants are not paying rent, or are causing damage and disturbance. Even in such cases, all landlords are currently powerless to take action to protect themselves.

Anti-social tenants who blight the lives of neighbours, communities, fellow tenants and landlords alike cause real distress.  As one tenant recently wrote on twitter: This is a total disaster. I’m living in a shared house with a nightmare tenant. We all want her gone, as does the landlady. Her anti-social behaviour is driving us and the neighbours up the wall. She was due to go on 1st July. I can’t put up with it for another two months.”

The current eviction ban, while protecting tenants, leaves many private or social landlords, especially those who had tenants building rent arrears prior to the lockdown, struggling.

Consider a buy-to-let landlord, who owns just one property, with a tenant who did not pay rent for a few months before lockdown and has not paid since. Having already had to wait to bring a case to court, and then faced delays with getting an order enforced (on average about 6 months) followed by five months of the repossessions ban, the landlord will have received no income for over a year.

Yet they must still meet costs such as licensing fees, insurance, and maybe even utility bills for the property. It is therefore hardly surprising that 29 per cent of landlords are reporting some degree of financial hardship according to the NRLA.

I believe the Government should now draw up plans for the coming months, once the eviction ban is lifted. Tenants who have struggled to pay their rent will be worried about their future whilst landlords with troublesome tenants or rent deficits will be looking for much-needed relief. The following framework of measures could show greater concern for the plight of small landlords, while also helping tenants who do their utmost to behave responsibly:

  • The Government should clearly re-state that tenants must, wherever possible, continue to pay their rent as normal. It is not realistic to suggest the Government should simply suspend the all rental payments because of the pandemic. Such suggestions reflect an assumption that all landlords are wealthy or large firms who can afford to receive no income from their properties. This is certainly not the case and denying people any income from their properties is unsustainable, and possibly illegal.
  • Government should offer landlords and tenants additional support, including mediation, to agree rent repayment plans where arrears have built as a result of the Covid outbreak. This would help prevent some repossession cases coming before the courts, which is important because sustaining tenancies wherever possible should be a priority.
  • Government should urgently consider Court reforms so that possession cases are heard more effectively and speedily. There is a huge backlog of cases and courts will struggle to meet the demand for hearings. This would, therefore, be an ideal time for major reforms, including a focus on modernisation, such as introducing online hearings and making better use of web based arbitration. Court reform is an essential part of ensuring the Government’s Renters’ Reform Bill works, and it has been well over a year since the consultation on developing a housing court closed, so a response is urgently needed.
  • Finally, we need clear plans to deal with the rental market if localised lockdowns are required to combat future Covid-19 outbreaks. The courts may, for example, want to pause repossession cases in those circumstances, but if this happens, landlords and tenants need clarity on the precise areas affected and the likely timeframes for any pause.

The private rented sector plays a vital part in housing the nation. Some seek to paint a picture of tenants and landlords in constant conflict, but in the vast majority of cases they have been working constructively to address the challenges of Covid-19. Once the immediate crisis measures are relaxed, the proposals I have outlined here could engender a sustainable balance between the rights of renters and of landlord. But Conservatives also need to bear in mind the political realities, and must avoid causing long-lasting problems for landlords.