Rent arrears reprieve for thousands of tenants

The Government announced on Friday 5 June that it is extending the ban on evictions for social housing and private tenants in England and Wales until 23 August 2020.

Tenants who are in rent arrears due to losing their jobs or having to self-isolate during the Covid-19 pandemic faced the prospect of court action beginning from 25th June.

The Government has said it wants court action to be a last resort and for landlords to exhaust all possible options, which could include negotiating flexible rent payment plans with tenants.

Whilst many private landlords with a mortgage on their rental property may have been able to take advantage of a 3-month mortgage payment break, there is no guarantee that this will also be extended for a further two months into August and there is little comfort for those landlords who themselves rely on the income from rental properties as their own main source of income.

Social housing providers will be left in a more difficult position in the longer term and it has been reported that a number of housing associations qualify for and have accessed The Covid Corporate Finance facility and Coronavirus Business Interruption Loan Scheme.

Marianne Webb at Gullands comments: “Whilst this pandemic is unprecedented and no one wants to see anyone homeless, the issue for many landlords is that they will be left with a significant income shortfall and they may still have to deal with tenants who are unable to pay once the revised deadline expires in August. The Government will inevitably have to look again at how it can support both landlords and tenants at the end of August.”

Marianne Webb is a Partner at Gullands Solicitors and can be reached at m.webb@gullands.com