Whilst many have not been surprised by Boris Johnson's announcement tonight of a second National lockdown, the news has been met with some anxiety by landlords. For those with tenants in extreme arrears (generally 9 - 12 months of total rent arrears), the news is likely to come as a huge blow as it means that, whilst eviction hearings could be heard by courts once again from 21st September, Bailiffs will now longer be able to enforce possession orders.
When the hold on evictions was announced, thousands of cases which were non-Covid related became backlogged in the system, including many cases of anti-social and illegal behaviour, and simple refusal to pay. A case in North London of a tenant who incurred £22,000 in rent arrears prior to COVID-19 was due to appear in court just as evictions were banned. The tenant avoided answering the case in court and now owes arrears close to £30,000, which has caused the landlord extreme financial hardship. There will no doubt be other landlords faced with unmanageable debts if possession orders cannot be enforced.
The more positive news is that according to the Government website, independent research shows that 87% of tenants have continued to pay full rent since the start of the pandemic, with a further 8% agreeing reduced fees with their landlords, meaning only 5% of tenants have been unable or unwilling to pay rent at all during the pandemic.
It also appears from tonight's announcement that the furlough scheme will be extended until December, good news for those whose jobs have been hanging in the balance since the initial lockdown back in March, leaving many tenants uncertain if they will be able to continue to pay their rent each month.
As always, it is absolutely critical for tenants and landlords to keep open the lines of communication and discuss any potential difficulties and possible resolutions before they escalate. Now more than ever, tenants and landlords should work together in the spirit of co-operation wherever possible, but if you're struggling to manage arrears or other tenancy problems, I can help. Just give me a call on 01268 955001.
Robert Jenrick has confirmed that the housing market will remain open during this second lockdown, and Baillie White Lettings & Management will continue to be available for our clients and customers by phone, email, Zoom, and where necessary to attend in-person viewings and inspections.