Dr Rosalind Beck is a doctor of Criminology and a Conservative Party member in South Wales.
The three-month eviction ban and effective shutting down of the rental market for nearly two months in England (longer in the rest of the UK) has led to thousands of pounds in lost income for many private and social landlords.
Contrary to what might be assumed, many of the rent defaults to date have not been caused by covid-19. By far the biggest problem has come from those who stopped paying rent months before the pandemic began.
Indeed the National Residential Landlords Association has found that most evictions are currently frozen in the court system – but still accruing rent arrears in most cases – ‘are down to existing ongoing anti-social behaviour issues and have nothing to do with Covid.’ Paul Shamplina, an eviction specialist, has also said he has 500 cases on his books which pre-date the pandemic. Across the country, there will be many thousands of similar cases.
With the three-month eviction ban due to end on June 25th, the predictable clamour has begun to extend it for another three months or more. Groups such as Shelter and Generation Rent who seem to have the ear of Government are at the forefront of demanding the ban be extended. This appears to be an easy solution; effectively making landlords continue to house people who aren’t paying and shoring up the problem for a later date.
In the meantime, the Government and others suggest that landlords take out additional loans – misleadingly presented as ‘mortgage holidays’ – to replace the missing rent of non-paying tenants.
This is in contrast to the approach taken in countries such as Spain where tenants are the ones expected to take out Government loans to cover their own debts.
Once the possession hearings are finally heard in court, a ‘tsunami of evictions’ has been predicted. All an extension will achieve is a delayed, bigger tsunami, with bigger losses for landlords and larger County Court Judgements against tenants, which will cause them grave problems when they look to rent again.
The Government’s latest announcement of millions of money to be spent on housing 6,000 rough sleepers will pale into insignificance and need to be multiplied by an as yet unknown figure with the wave of newly homeless people arriving at council doors.
Supply of rental property will shrink massively just as a greater number of homes are needed. Many of the 45 per cent of landlords who own only one rental property will sell or leave their property empty. One can’t take the risk of getting a non-payer when there is no legal redress. Other landlords will go bankrupt as a result of paying for other people’s accommodation and often also their utility costs.
What’s more, the eviction ban and the proposed scrapping of Section 21 notices will make those who do remain in the market, particularly portfolio landlords who house the majority of tenants, reluctant to rent to anyone other than those considered to carry the least risk of defaulting.
Guarantors will become indispensable – which will disqualify many tenants from consideration. Just how many hotels, B&Bs, camp or caravan sites will be needed to house those unable to access any rented housing?
This is the natural consequence of the State chipping away at the property rights of those willing to loan their property to others. Handing unconditional ‘security of tenure’ to tenants – some are now demanding tenants have the right to remain regardless of whether or not they pay the rent ‘for a minimum of 12 months’ – means the non-owner and even non-payer would have more control over the property than the owner, who may also be paying a mortgage and who remains responsible for all maintenance, insurance, adherence to regulations and so on. Landlords are going to be terrified they might rent to the wrong person and be faced with this disastrous scenario. Confidence within the sector will be seriously damaged.
In this context, victims of domestic violence will be especially vulnerable. There are likely be more deaths of women in particular as a result. This is because currently, private landlords provide 90 per cent of all housing to the homeless and according to official figures only two per cent of households made homeless in England because of domestic abuse between April and December 2018 were offered social housing. The state’s role is negligible.
These victims need to move out of the home where they are in danger; others need to move on from women’s refuges, instead of inadvertently ‘bed blocking’ accommodation desperately needed by other women under threat of violence. When there are no private rentals for them to go to this flow from abusive home to refuge to a privately rented home will come to an abrupt halt.
That a Conservative Government should be considering this assault on private property rights is astonishing. It is more extreme than most things Jeremy Corbyn had planned.
In fact, what the Government needs to do is perform an immediate u-turn in the approach to the sector it has taken since George Osborne introduced the pernicious Section 24 whereby many landlords now pay more tax than they receive in profit. This absurd law had placed huge financial stress on landlords even before the Government’s lockdown measures.
If the ban is now extended it is going to have catastrophic consequences in situations where landlords are already facing really high rent arrears and further arrears as more tenants lose their jobs. It is simply wrong for the Government to expect private citizens – that is, landlords – to not only accommodate the ‘rogue’ element of tenants rent-free but also to indefinitely accommodate people affected by covid whilst receiving no rent. It is unjust, unsustainable and ill-thought-out.
The Government must stop meekly adopting the policy suggestions of groups who despise private landlords and who do not understand the sector, having never been involved in housing provision and having no expertise in it. Not everyone knows this but Shelter with an annual budget of around £60 million does not provide a single roof over anyone’s head.
The Government must stop listening to this organisation and must instead consider the wider consequences of an extension to the ban. Private landlords remaining in the sector won’t touch with a barge pole those they know left other landlords with huge debts. Social housing providers also won’t house them; they will be facing a similar tsunami of evictions in their sector; added to which, they too need to balance their books and have long waiting lists and no spare capacity.
The Government must categorically not extend the eviction ban; not unless it wants to make a big problem even bigger.