What does the 6 month no eviction rule mean for landlords?

In August 2020, the government extended the tenant eviction ban for a further four weeks leaving many renters breathing a sigh of relief. 

However, thousands of buy-to-let landlords are now facing financial problems and worries about how they’ll cover their tenants' shortfalls in order to repay their BTL mortgages. 

With the added news that landlords must also now give renters six months’ notice to repossess, we’ve created this short guide with the information you need to know as well as where you can go for advice.

Are most tenants able to pay their rent?

According to a recent poll by the NRLA, the vast majority of tenants have paid rent through the crisis with more than 95% having either made full payments, or at least setting up repayment agreements with their landlords.

The NRLA research shows that 87% of landlords receive full pay with no issues at all from renters. Just 3% have reported tenants in arrears who are unwilling or unable to resolve the issue.

Why has the government extended the ban on evictions?

At the start of lockdown in March 2020, evictions were completely banned in Wales and England in response to the thousands of tenants who had suddenly been faced with job losses and hardship. 

The ban on evictions was originally planned to last for three months but the decision to extend the ban for a further two months and then again for another four weeks, was taken in light of the risk of homelessness to many vulnerable people. 

When can I take my tenants to court?

The extended bans now means that landlords cannot take their tenants to court until the 20th of September 2020 meaning most tenants will now be able to stay in their homes until at least the end of March 2021.

Can I evict my tenants if I live in Scotland or Northern Ireland?

Eviction bans in Scotland and Northern Ireland have already been extended until March, 2020.

What if my tenants were already in arrears?

Buy-to-let landlords facing issues such as antisocial or criminal behaviour from tenants or extreme rent arrears will be top priority when courts reopen. Those who wish to evict due to other reasons may need to wait a while longer.

In response to concerns from landlords about tenants who had already missed rental payments or caused anti-social issues in their rented homes before Covid-19, Housing Secretary Robert Jenrick said,

“It is right that the most egregious cases, for example those involving anti-social behaviour or domestic abuse perpetrators, begin to be heard in court again; and so when courts reopen, landlords will once again be able to progress these priority cases.”

Will the government protect landlords and the rental sector?

Ben Beadle, chief executive of the National Residential Landlords Association (NRLA), said: 

“Landlords have been left powerless in exercising their legal right to deal with significant arrears unrelated to Covid-19, antisocial behaviour and extremely disruptive tenants who make life miserable for their neighbours and housemates.”

“There must now be a plan to support households to pay their bills and to compensate landlords fully for their lost income.”

In light of this criticism and in response to landlords and tenants who are financially struggling, the government has put in place a support package which aims to reduce rental arrears and prevent and protect both parties.

What are the measures in the support package?

• The government is working with the Master of Rolls to strengthen the pre-action protocol requirement and also extend this to the private rented sector. This will help landlords and tenants to agree reasonable repayment plans where rent arrears may have arisen.

• £500 million has been made available to fund households experiencing financial hardship.

• As part of the workers’ support package, the Chancellor announced the government will pay up to 80% of a worker’s wages, up to a total of £2,500 per month, where workers are placed on the Coronavirus Job Retention Scheme.

• Both Universal Credit and Housing Benefit have increased and from April, Local Housing Allowance rates will pay for at least 30% of market rents in each area.

Where can I go for advice about my BTL mortgage?