Today we look at discussions on plans to reopen the courts, calls to extend the evictions ban, updates to repairs guidances and opposition to the stamp duty cut announced last week.
Minister says courts must operate within ‘current legislative framework’.
Charlotte Nichols MP (Labour, Warrington North) has received a response to her written question asking what plans the Government has to prevent the eviction of private tenants after 23 August 2020.
The Housing Minister, Christopher Pincher MP, responded: “To help prevent tenants getting into financial hardship or rent arrears, the Government has put in place an unprecedented support package.
“This includes support for business to pay staff salaries, as well as boosting the welfare system with over £6.5 billion. These significant financial measures will help support tenants to continue to pay their living costs, including rental payments.
“Landlords must follow strict procedures if they want to gain possession of their property, depending on the type of tenancy agreement in place and the terms of it. This currently includes providing tenants with at least three months’ notice.
“My Department is working closely with the Ministry of Justice and the judiciary on arrangements.
“These include new rules, to ensure that when the suspension of possession proceedings ends, the courts are better able to address the need for appropriate protection of all parties, including those shielding from coronavirus.
“This is to ensure that judges have all the information necessary to make just decisions within the current legislative framework and that the most vulnerable tenants will get the help they need.”
Minister resists calls to extend evictions ban
The founder of the Big Issue, Lord Bird (Crossbencher) yesterday asked his oral question in the House of Lords about what steps the Government is taking to ensure that there is no increase in homelessness once the ban on evictions is lifted.
Responding, the HCLG Minister, Lord Greenhalgh, responded: “The Government have provided an unprecedented package of support to protect renters.
“We have provided income protection schemes and have boosted the welfare system by more than £6.5 billion to prevent people getting into financial hardship.
“These measures will ensure that those most in need will avoid the risk of homelessness once the stay on possession proceedings ends.”
In his supplementary question, Lord Bird, said: “Do the Government know of the Big Issue’s ride out recession alliance, which is bringing players together to help the Government and local authorities so that they can keep people in their homes?
“If they slip into poverty and homelessness, it is very difficult to get them out of it. I also draw attention to the work of Shelter, which is calling for a change in the law so that magistrates will not authorise eviction if it is caused by Covid-19 poverty.”
The Minister replied by saying it was helpful to raise these initiatives. He went on to say: “He will be aware that there is ongoing work, through the Master of the Rolls, looking at the guidance on this.”
Baroness Blower (Labour) then said: “Ultimately the way to prevent an increase in homelessness is rent controls and the abolition of no-fault evictions.
“However, given that Shelter and Crisis have predicted thousands of possible evictions next month, the Government should enable emergency legal provisions to allow judges to prevent evictions where people have complied with reasonable and affordable repayment arrangements or are awaiting decisions on their benefit entitlement. Does the Minister agree? If not, why not?”
The Minister replied: “I do not agree with the policy of rent controls. It is far more important to follow the guidance and find solutions other than eviction.
“Our guidance encourages landlords not to seek to repossess their properties during the period where their tenant may be sick or facing hardship due to Covid-19 and to work with their tenant to agree a plan that works for both parties. That is better than the kind of intervention that she suggests.”
One of the Vice Chairs’ of the APPG for the Private Rented Sector, Baroness Grender (Liberal Democrat) then said: “Is the Minister aware that, according to the Resolution Foundation, private renters are twice as likely as home owners to have struggled with housing costs due to the pandemic?
“Why, then, in last week’s financial Statement were homeowners awarded a stamp duty tax cut worth £1 billion, in addition to all the other previous measures, while the 20 million renters got nothing?”
The Minister responded: “I do not agree that renters have received nothing. The noble Baroness will be aware that we have strengthened the welfare safety net with a boost to the welfare system of over £6.5 billion, and that we have increased the local housing allowance rates to cover the lowest 30% of market rents.
“In addition, a budget of £180 million has been made available for local authorities to distribute in discretionary housing payments.”
Lord Best (Crossbencher) then raised the proposal around hardship loans for tenants. He told Peers: “Has the Minister had a chance to consider the arrangements introduced in Spain to prevent evictions?
“Tenants with rent arrears caused by Covid-19 are entitled to an interest-free government-guaranteed loan to pay the landlord and remove the grounds for eviction, with the loan being repaid over a six-year period.”
The Minister responded: “Instead of following that model, our intervention strengthens the welfare safety net, increases the local housing allowance and provides discretionary housing payments to support renters.”
Later on, the former CLG Secretary, Lord Pickles (Conservative) suggested a further extension to the repossession ban to provide more time to sort the situation out in relation to the PRS.
He told the House: “Given the current uncertainties, would it not make sense to extend the moratorium on evictions beyond September to allow three things to happen:
- first, for the consequences of the Government’s stimulus to the job market to be felt
- secondly, for the amendment to the pre-action protocol overseen by the Master of the Rolls to be delivered and understood
- finally, to give time to amend housing legislation to allow judges greater discretion with regard to eviction cases
Does my noble friend agree that this action is preferable to introducing measures against a rising tide of evictions in the autumn?”
The Minister replied: “We are exploring a number of options to further protect tenants, including a pre-action protocol for claims for possession by private landlords.
“This might not be the way to achieve our objective, so our priority is to work with the judicial working group convened by the Master of the Rolls on arrangements, including new rules, that will mean that courts are better able to address the need for appropriate protection of all parties once the stay on possession proceedings ends in August.”
Government to update repairs guidance
The Shadow Housing Secretary, Thangam Debbonaire MP(Labour, Bristol West) hasreceived a response to her written question asking what guidance the Government plans to provide to landlords of clinically vulnerable tenants, who are currently in the shielded category, on accessing rental properties to carry out routine inspections and repairs after 1 August 2020.
The Housing Minister responded: “The advice for those shielding is due to be relaxed from 31 July 2020, so that from 1 August 2020, individuals in the clinically extremely vulnerable group will no longer be advised to shield.
“From 1 August 2020, the guidance given to the clinically extremely vulnerable group is due to be in line with advice currently given to the clinically vulnerable group.
“Currently, the Government guidance is that no repair or maintenance work should be carried out in any household where an individual is being shielded, unless that work is to remedy a direct risk to the safety of the household.
“From 1 August 2020, advice for those currently in the clinically extremely vulnerable group is due to be relaxed, allowing tradespeople to carry out routine inspections and repairs in households that were previously shielding.
“It is important that inspections and repairs are carried out in accordance with the latest guidance on working safely in people’s homes.
“Where these visits occur, landlords and tenants should work together to make prior arrangements to ensure that social distancing is maintained, and appropriate hygiene measures are followed.
“Published guidance will be updated accordingly.”
Opposition to stamp duty cut
MPs yesterday gave approval to the Stamp Duty Land Tax (Temporary Relief) Bill which enacts the Government’s changes to stamp duty as outlined in the Summer Statement.
Of note, a number of opposition MPs expressed concerns at second reading that they felt the move benefits those with second homes and buy-to-let investors.
Dan Carden MP (Labour, Liverpool Walton – Shadow Financial Secretary to the Treasury) said: “We have serious questions about why the Bill includes significant support for second homeowners—plans that were slipped out by the Treasury after the Chancellor delivered his statement.
We need to understand why the Government have decided, as my hon. Friend the Member for Bristol West (Thangam Debbonaire) said last week, to direct a huge bung to second homeowners, landlords and holiday-home buyers while millions of people are desperate for support. The provisions in the Bill are an unnecessary subsidy for second homeowners that will only worsen the housing crisis by reducing the supply of homes overall.”
Siobhain McDonagh MP (Labour, Mitcham and Morden) said: “Providing more incentive to people who already own their own home or are part of the buy-to-let market effectively crowds out first-time buyers.”
Matt Western MP (Labour, Warwick and Leamington) said: “For me, there is an issue with the second homes sector. Previously, a second homeowner or buy-to-let landlord would have paid an additional 3% stamp duty surcharge, which would translate into a figure of 8%, rather than 5%.
These changes mean that anyone looking to buy a second home at between £250,000 and £500,000 will pay just 3%. Coming back to a point that was made earlier, we need to know the scale of the issue. What proportion of transactions are for second properties?
In the last 12 months, 34% of all purchases were made by second homeowners. That has to be a concern, because it affects the market to the detriment of first-time buyers.”
Pat McFadden MP (Labour, Wolverhampton South East – Shadow Economic Secretary to the Treasury) said: “If the Chancellor really wanted to announce a stamp duty holiday, was it necessary to extend it to buy-to-let landlords and people purchasing second homes?
“What will be the benefits for overseas buyers, some of whom have seen the most expensive London property almost as a reserve currency? Both those groups are already treated differently within the existing regime, and they could have been treated differently in this change.”
Winding up the second reading debate, Jesse Norman MP (Financial Secretary to the Treasury) said: “Although those buying second homes or buy-to-let properties will benefit, and make a very important economic contribution in so doing, they will continue to pay an additional 3% on top of the standard stamp duty land tax rates.
“Let us not forget that it was this Government who introduced the phasing out of finance costs relief, as well as the higher rates of stamp duty land tax for the purchase of additional property—all steps towards a more balanced tax treatment between homeowners and landlords.”
At committee stage of proceedings, MPs considered an amendment which would have required the Treasury report to Parliament on the impact of the Act, and in particular its impact on different groups of property owner.
The amendment was not put to a vote so therefore the Bill progresses to the House of Lords without having been changed by MPs.