LATEST: Rental market to take two years to recover from Covid

Long-term arrears and loss of credit-worthiness among tenants and loss of income and confidence among landlords will ©1999 - Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® - LATEST: Rental market to take two years to recover from Covid | LandlordZONE.

LATEST: Rental market to take two years to recover from Covid

Long-term arrears and loss of credit-worthiness among tenants and loss of income and confidence among landlords will continue to scar the private rented sector until 2023, warns a new landmark report.

Homelessness and rough sleeping in the time of Covid’ finds that the evictions ban has left tenants racking up debt while nothing has been done to help landlords facing significant losses from arrears.

The report – by a research group within the LSE – believes re-starting evictions won’t alleviate the problem for many months.

Lower rental incomes could also lead to a significant restructuring of the private rental sector, making the future even more uncertain.

It adds that normality, even with respect to court proceedings, appears to be at least two years away.

The LSE report says that more than 400,000 private tenants may be in significant rent arrears by the end of 2021 and at risk of eviction if the government lifts its suspension on eviction proceedings from 1st June.

Slow burn until 2023

But it adds that spikes in evictions are highly unlikely; rather there will be a slow burn that will go on at least into 2023.

Currently, 6-7% of tenants appear to be in arrears, which is twice the proportion of a ‘normal’ year.

But large numbers won’t immediately find themselves homeless because the courts simply won’t be able to cope with the cases.

It recommends that greater protections are put in place to protect private tenants and landlords, including immediately stopping ‘no fault’ Section 21 evictions while speeding up court proceedings for extreme cases of failure to pay rent.

It wants the government to support Discretionary Housing Payments and to help those without access to UC but in rent arrears, such as through low interest rate loans.

Dr Nancy Holman (pictured), co-author of the report, says: “Unfortunately, these solutions are partial. In a crisis of this magnitude there are no easy answers. One in five households in England rent, with many having no other option. If we are to avoid catastrophic problems in the future, we must ensure that the private rented sector remains sustainable.”

Read the report.

Read more about arrears.

©1999 - Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® - LATEST: Rental market to take two years to recover from Covid | LandlordZONE.

Source : Landlord Zone More   

What's Your Reaction?

like
0
dislike
0
love
0
funny
0
angry
0
sad
0
wow
0

Next Article

NEW: Landlords warned to expect court delays as 100,000 evictions pile up

Courts are set to buckle under the pressure once the eviction ban restrictions end, with most cases ©1999 - Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® - NEW: Landlords warned to expect court delays as 100,000 evictions pile up | LandlordZONE.

NEW: Landlords warned to expect court delays as 100,000 evictions pile up

Courts are set to buckle under the pressure once the eviction ban restrictions end, with most cases entering the system now not likely to be completed until well into 2022, a report has warned.

Compiled by the , the report paints a bleak picture of the court system, estimating that at least 100,000 claims could be subject to court proceedings during this year.

While only a third of those that start the eviction process reach formal repossession, it says about twice as many tenants as normal are in arrears and these arrears are likely to be rising.

As a result, the time taken to get an order, let alone to reach repossession – 42 weeks on average – is unlikely to fall.

The report predicts that hardly any potential claims under either Section 21 or Section 8 will get to court until at least the second quarter and many might not even start the process through the courts until late in 2021.

The latest figures for the last quarter of 2020, compared to 2019, showed that landlord possession actions in terms of claims (8,382), orders for possession (2,195), warrants (1,792) and repossessions (548) dropped by 67%, 89%, 86% and 93% respectively.

Solutions

LSE London suggests that if social landlords who, pre-pandemic brought the majority of the cases, continue to delay starting eviction proceedings, more space would be left for private landlord cases.

The government could also put more resources into the courts. The report says: “This obviously has potential but seems to be unlikely given the priority that must be given to the criminal system and the attitude of government to private landlords during the pandemic.”

It adds: “It is likely that the need to speed up criminal cases in county courts will put further pressure on those available to deal with civil issues. Arguably therefore whether or not landlords start formal proceedings hardly matters, except for the months of insecurity, mental stress and hardship facing so many tenants and indeed landlords.”

Read the report in full.

©1999 - Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® - NEW: Landlords warned to expect court delays as 100,000 evictions pile up | LandlordZONE.

Source : Landlord Zone More   

This site uses cookies. By continuing to browse the site you are agreeing to our use of cookies.