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News update: industry body calls for help with evictions and landlord hardship

The trade bodies are sometimes accused of not taking enough
direct action, or being too toothless in their approach, but the leading
landlord and letting agent associations are now taking the fight to the
government to protect landlords from financial difficulty and improve the
eviction process for all parties.

Following on from the NRLA’s
passionate plea to radically transform the evictions process
, to make it
fairer, simpler and out of the courts as much as possible with a
publicly-funded landlord and tenant conciliation service in a similar vein to
the employment dispute body, ACAS, ARLA Propertymark – the UK’s biggest letting
agent trade body – has said the government must act on the eviction backlog and
landlord hardship to ensure the rented sector can continue to function successfully.

What did ARLA Propertymark say?

The trade association gave a detailed response to a
government consultation on how the pandemic has hit the private rented sector,
with formal and informal evictions first and foremost in ARLA’s reply.

It warned that the sector could be impacted in four ways
following the second wave of coronavirus, which has led to both the
controversial tiered systems and the second national lockdown in England (with
similar restrictions throughout the rest of the UK).

It says that arrears are likely to rise, landlords’ finances
will be hit, compliance will be increasingly difficult, and there will be
a growing need for financial protection for the most affected.

In a statement, ARLA urged the government to recognise that
the private rented sector has already been heavily impacted financially in
recent years - based on the phasing out of mortgage interest tax relief, the
additional 3% stamp duty surcharge on buy-to-let property and the Tenant Fees
Act 2019.

“However, the ongoing repercussions of the pandemic mean
that landlords' costs have increased significantly, and many landlords can no
longer make ends meet,” the statement added.

It broke the bulk of its response down into four sections.


ARLA’s members have reported that a small number of tenants
have taken the government’s decision to protect renters during the national
restrictions, and over Christmas with no bailiff enforcement action, as a green
light to refuse to pay their rent.

The body believes there is ‘no reasonable certainty’ of how
landlords can recover costs in these cases.

Financial support

When it comes to financial assistance, ARLA had four demands
for the government, namely:

1) Ring-fenced funding delivered to local authorities and
sent to tenants via the Discretionary Housing Payment.

2) A government-backed interest-free loan delivered to
tenants who cannot access the Discretionary Housing Payment and paid directly
to landlords.

3) Ensuring that Universal Credit is adequate and more

4) Raising and restoring the Local Housing Allowance to the
50th percentile to cover the average cost of rents in a local area.

Selective licensing

On selective licensing, which is in place in some parts of
the country but not others, ARLA wants the government to control councils
pressing ahead with licensing scheme after scheme.

That’s because it says these will hit tenants in three ways:

1) The likely passing on of the cost of licensing to tenants
in the form of rent increases.

2) If landlords who cannot afford the license fee decide not
to pay and remove their property from the market, tenants will be forced to
seek new homes.

3) With some agents furloughed or working from home, they
are unable to access relevant paperwork and documentation to complete licensing
scheme applications and process fees.

As such, ARLA warns that councils which are pursuing the
implementation of licensing schemes are being ‘socially irresponsible’ as it
needlessly puts ‘vulnerable people at risk of being infected’.


Lastly, it called for the government to employ a holistic
approach that considers the financial implications of both the pandemic and
existing costs that landlords face, to help lessen the impact of the second
wave on the private rented sector.

“Fundamentally, landlords cannot be expected to provide
homes without being paid. In many instances, rent covers the landlord’s
mortgage and maintenance costs, meaning that non-payment puts the tenant at
risk of eviction and the landlord at risk of repossession,” ARLA concluded.

Reasons to be positive

Despite the above, and the definite challenges and obstacles
posed by Covid, there have been reasons to be cheerful for landlords this year
– particularly in the form of record high demand after the first lockdown as tenants
sought new homes to match their changed priorities and life choices.

Equally, record low interest rates, the stamp duty holiday
and positive sentiment among buyers and sellers has made expanding a portfolio
or starting out in the sector a more appealing prospect.

The government has also introduced the Green Homes Grant to
make it easier for landlords upgrade the energy efficiency of their homes.

With evictions set to be very difficult for the foreseeable
future, you will likely want to avoid this scenario if at all possible. If you
were considering selling up and an exit from the PRS, you may want to think
again or hold off until the situation is calmer once more. Or consider selling
with sitting tenants, potentially even at auction.

If you are having issues with tenants, perhaps surrounding
tenant arrears, it is a good idea to adopt an understanding approach and work
proactively with them to come up with a solution that works for all parties.

A good landlord-tenant relationship is important at all
times, but even more so at the moment with the challenges and restrictions
wrought by Covid. By working closely with an experienced, knowledgeable letting
agent, who understands the area you are letting in like the back of their hand,
you can rest assured that communication with your tenants will be excellent and
any issues resolved as soon as possible.

As a top letting agent operating across Essex and East
London, here at Ideal Locations we can help you to get the most out of your
rental homes.

For more information on our current operations, please contact
us today