Today we examine Labour calls for a ban on eviction of tenants falling behind on their rental payments due to Coronavirus. We also look at new data claiming more landlords plan to sell up and examine a Lords debate on electrical safety standards.
Labour calls for eviction ban
The Labour Party has published a proposed draft Bill to ban evictions of tenants who fall behind on rent due to coronavirus.
The press release says that the Bill “would bar landlords from evicting tenants who are off work and not getting paid due to coronavirus, by changing the legal basis on which landlords can seize possession of a rented property to exclude arrears which have built up due to the effects of the coronavirus pandemic.”
The Shadow Housing Secretary, John Healey MP, said: “The coronavirus pandemic requires a rapid response from the government to protect families.
“Our current threadbare legal safety net means renters are vulnerable to eviction if they get ill and fall behind on their rent. The fear of being evicted may also mean workers are reluctant stay off work and self-isolate.
“Our emergency legislation would protect renters from eviction, and we urge the government to work with us to adopt it and implement it at the earliest opportunity.
“This is an essential first step in public reassurance, giving people confidence they can follow official health advice in responding to coronavirus without putting their home at risk.”
Full details, including a draft of the suggested Bill can be accessed here.
Government quizzed on self-isolation for renters
Helen Hayes MP (Labour, Dulwich and West Norwood) has received a response to written question asking what assessment has been made of the ability of people living in:
(a) households that are overcrowded
(b) houses in multiple occupation
to self-isolate in response to a potential covid-19 infection; and what steps are being taken to support social housing providers to prepare for a potential outbreak of that virus.
Housing Minister, Christopher Pincher MP said: “MHCLG continues to work with local partners, including local authorities and local resilience forums, to assist preparedness to manage the potential effects of the Covid-19 outbreak.
“That is why Public Health England intends to publish further guidance for hostels and day centres imminently. We are considering whether further action is required and are working with the sector to develop an appropriate response as a matter of urgency.”
Figures show almost half landlords thinking about selling-up
Aldermore’s latest buy to let research, surveying 1,000 UK-based landlords, reveals that nearly half (48%) of landlords are considering divesting due to an increase in regulation and rules.
The rule and regulation changes seen recently, including the introduction of a 3% stamp duty on rental/second properties, changes to taxation and more complex mortgage applications, has meant nearly three in five (59%) say it is much harder being a landlord now than five years ago.
New regulatory environment has an effect
The impact of regulation is clear, with two thirds (68%) of respondents feeling that recent changes have been too broad and need to focus more on punishing the rogue landlords.
A quarter (28%) said that regulatory change was the biggest threat to their investment, while others cited tax changes (33%) and high maintenance costs (28%) as barriers.
It has also led to increased admin with two in five (40%) saying increased rules meant their most recent mortgage application was more difficult than previous.
In addition, it appears to have affected business decisions, with 49% of landlords saying the increase of stamp duty has prevented them from expanding their portfolios.
Three in five (59%) of landlords also believe that the ban on lettings fees may result in landlords raising their rents due to the increased costs put upon them.
Rental market may be negatively impacted
The impact of divesting would be wide-ranging; with 53% of landlords believing that private landlords exiting the market would hurt the quality of properties available to tenants.
Not only this, but landlords are also a critical part of the housing ecosystem. They service a wide and diverse group of the population but predominantly those in earlier life stages; 32% of their tenants are young couples and 29% are parents with young children.
Despite the pressures, landlords are currently feeling, the research revealed that more than half (52%) would still recommend becoming a landlord as an investment opportunity.
Full details are available here.
Peers consider electrical safety regulations
The House of Lords yesterday considered the Electrical Safety Standards in the Private Rented Sector (England) Regulations 2020.
Of note, the Government’s spokesperson, the Earl of Courtown said: “Private landlords make an extremely valuable contribution to the housing market.
The majority of landlords in England provide well-maintained and safe accommodation for their tenants, allowing them to put down roots, work and thrive in their communities.
“However, some landlords wilfully flout their responsibilities and put their tenants at a significant risk of harm as a result.
“This is not acceptable. These regulations will target those irresponsible and unscrupulous landlords and will help to level the playing field for the majority of good landlords who already meet this requirement.
“As a result, the regulations will help to drive up safety and standards across the private rented sector and reduce deaths and injuries caused by electrical faults.”
Lord Tope (Liberal Democrat) expressed concerns about the ability of local authorities to enforce the new regulations and called for proper funding to support this.
He went on to say: “Although all the professional bodies, including Electrical Safety First, believe that this legislation is completely fit for purpose, I understand that some landlords are concerned about some of its language, particularly what is meant by “the eighteenth edition of the Wiring Regulations”.
“Can the Minister explain why it mentions this standard, and can he assure landlords that this does not impose any further burdens on them, such as the need to rewire, so long as their properties are safe in the first place?
“I am told that some landlords are concerned that the legislation may create a temporary loophole in safety legislation for houses in multiple occupation. Can the Minister clarify that there will be no such safety gaps for tenants in these properties and no reason, therefore, to delay the legislation’s introduction?”
Baroness Grender (Liberal Democrat), whilst expressing support for the Regulations, said: “As with the ban on tenant fees, the wheels of government appear to move slowly when it comes to people in the private rented sector, who, I believe, continue to be treated as second-class citizens. This extends to the current coronavirus pandemic.
“Much effort is being made to ensure that there are holidays for mortgage payments. Every time the Government make such a move, I ask them to ask themselves the following question: how do we mirror this now in the private rented sector, given that, even by the Government’s own figures, which I believe to be a significant underestimate of 4.8 million households, over one-quarter of the population is excluded from something like a mortgage holiday?
“What is the equivalent in the private rented sector? Will the Minister urgently look at rental holidays, too, to help those who are often the poorest through this crisis?”
She also called on the Government to revisit its stance on a national register of landlords.
The Shadow Minister, Lord Kenendy of Southwark (Labour) said that whilst he was supportive of the Regulations it was “outrageous” how long it had taken to get to this stage.
In response, the Earl of Courtown said guidance would be prepared for landlords, local authorities and tenants on the Regulations. He went on to say:
“These regulations will not mean additional work for local authorities, because local authority environmental health departments are already responsible for enforcing electrical safety standards in the private rented sector.
“The new regulations will in fact make it simpler for local authorities to do this, because landlords will now have to provide them with proof that their electrics are safe. As I said before, local authorities will also be able to keep any money raised from financial penalties to fund their enforcement activities, helping to raise standards in the long run, and these penalties can be up to £30,000 for the most serious offenders.”
In respect of HMOs he said: “All existing houses in multiple occupation, both licensable and non-licensable, will need to comply until 1 June 2020 with the requirement in the 2006 HMO management regulations to have electrics tested. Any new tenancies created from this date will need to comply with the new electrical safety regulations from 1 July 2020.
“In respect to existing tenancies in HMOs, all such properties should already have a certificate stating they have been inspected and tested in compliance with the 2006 regulations; this certification lasts for five years.
“In some HMOs, an electrical installation condition report may run out between the coming into force of the regulations on 1 June 2020 and 1 April 2021.
“However, during the familiarisation period, local authorities can rely on their enforcement powers under Part 1 of the Housing Act 2004, which requires that electrical safety hazards are remedied, and tenant safety is protected. Local authorities use their housing health and safety rating system to assess electrical safety hazards, and they have a duty to take full enforcement action if they identify a hazard at category 1 level.”
The debate transcript can be accessed here.
The House of Lords also considered the Client Money Protection for Property Agents (Approval and Designation of Schemes) (Amendment) Regulations 2020.
The transcript of this debate can be accessed here.