The government have been forced to intervene in the property market in ways rarely seen throughout our modern history during the Coronavirus pandemic.
Of course, it’s true that to some extent every government has a hand in the property market, and certainly more than ever since the 80’s when it is such a large source of wealth and social mobility for the majority of the country.
Much unlike the attitude of Europeans across the English Channel, Britons have always strived to own their own homes and home ownership rates, whilst dropping over recent decades, far exceed those abroad and in continental Europe.
With a number of government interventions having dealt large blows to landlords and the Buy to Let property industry in recent years, and other legislation strengthening the rights of tenants, it’s perhaps unsurprising that this government would look to intervene to stop mass evictions and homelessness at a time of economic uncertainty.
It’s the right thing to do, of course, but it should be done in a balanced way that also seeks to avoid huge losses for landlords that are, broadly speaking, not huge portfolio owners worth millions of pounds, but smaller investors looking to make a good return on money in a tough environment.
The new laws and what they mean
According to Which?, there are a series of steps a landlord must take to evict someone:
- Issue a Section 21 or Section 8 notice with the date they want a tenant to leave
- Get a possession order from the court if a tenant stays beyond the date
- Ask the court for a warrant of possession if they don’t leave on time. The court then sends an eviction notice to the tenants, who can be evicted by a bailiff
Someone can only be evicted if correct procedure has been followed and they could challenge the order if they have been discriminated against.
Back in March, when the Coronavirus hit and the government was forced to close down most of the economy to get a grip of the spread of COVID-19, there were real and legitimate concerns that many people could experience a very sudden and significant reduction in their income, and to stop a crisis of homelessness they felt they had to step in.
According to The BBC, Landlords with tenants experiencing financial difficulties due to the pandemic have been able to apply for a mortgage payment holiday, which ends in October.
Landlords have still been able to issue possession and eviction notices during the ban, with extended notice periods.
In England, the government says that allowing eviction hearings to resume is an important step towards protecting landlords’ rights.
Resolution
There have been many proposals set out by government bodies and charities, but by far the most useful resolution for both tenants and landlords is to start a dialogue with each other about their situation.
As there is a hold on evictions and likely to be a hefty backlog, it is in both party’s interests to come to some sort of compromise where perhaps a tenant can pay off arrears over time. The cost of going through the courts, instructing bailiffs and perhaps recovering nothing represent a greater risk than negotiating and this should be kept in mind.
Honesty is the best policy on both sides, and some flexibility should be given too. Hopefully people don’t find themselves in such a situation, but if they do it could also be worth speaking to an experienced agent, or perhaps a charity or the Citizens Advice too.
