Time is running out for renters who have fallen behind due to the Coronavirus pandemic. Affordable homes are needed now to stop a rise in homelessness before a hard winter.
On September 21st, the Government’s moratorium on rental evictions in England and Wales comes to an end. These rules, designed to ease the burden on renters struggling to make ends meet during the Coronavirus pandemic, have been in force since March. However, with the economy slowly returning to normal, the Government believes it’s time to lift the restrictions on landlords to evict problem tenants.
It’s important to note that in areas with local lockdowns due to the virus, the ban on evictions remains. It is a reprieve for renters at a stressful time.
What are the consequences of the return of rental evictions? Could providing more affordable homes be the answer to the problems it will cause?
Problems for renters
The issue for renters is that the Coronavirus pandemic and the lockdown could have drastically affected their ability to earn. They could have been made redundant, or put on furlough earning 80% of their regular wage. They could be working in sectors such as hospitality, which still has not bounced back due to Coronavirus restrictions. The eviction ban was supposed to give them a chance to rebuild their earning power without worrying about losing their home. Unfortunately for some, the ban has been lifted too early.
Shelter estimates that more than 250,000 are currently in rent arrears, with 174,000 already notified by their landlords that they face eviction.
A slight reprieve?
While the Government is clear about lifting the rental eviction ban, it has altered the rules slightly to give renters a fighting chance.
It has changed the law around notice periods, increasing the minimum notice period that a landlord can give a renter to six months. That means that even if a landlord gives notice to a renter in September, they will have until March to find new accommodation before they have to leave. This should avoid a rise in possible homelessness during the winter months.
The Government also announced a ‘Christmas truce’ on evictions – a temporary ban on rental evictions in the run-up to Christmas and over the holiday period.
There are exceptions, however. Landlords can still evict on the grounds of antisocial behaviour, fraud or domestic abuse.
Striking a balance
The Government is stuck between a rock and a hard place on this issue. While it will be accused of lacking in empathy with renters who have been hit hard by COVID-19, it also has to respect the rights of landlords to collect rents on their properties. It is a tricky situation.
Landlords will have found it difficult during the lockdown period as well. They may have been made redundant or furloughed from their jobs too, and could be relying on the money they collect from their rental properties.
Another matter that the Government has to think about is homelessness. Some renters evicted from their homes may have no choice but to go into temporary accommodation, or even onto the streets.
Lifting the ban on rental evictions comes at the same time as the ending of Coronavirus provisions for homeless people. You can read an article about this here. Homeless people were taken to stay in empty hotels to keep them safe during the crisis. In many cases, it was the nudge homeless people needed to get themselves back on their feet and off the streets. Will we be replacing one set of homeless people with another?
A better solution
Providing more affordable housing is the answer to the problems the Government and renters are facing here. If there are going to be more lockdowns in the future, affecting renters’ ability to make money, we need a solution fast.
Affordable housing means property developers allocate a proportion of their new builds to housing associations, which are then available for people to buy at an affordable price with favourable financing. They are for people who have not owned properties before and do not have the income to buy a home any other way.
The great thing about affordable housing is that it gives all the benefits of property ownership to people who might not be able to get it any other way:
- Health benefits – statistics show that property owners eat better and have better access to medical facilities, as they don’t have to make as many trade-offs with their finances
- Mental health benefits – having somewhere to call your own reduces stress
- A better life for children – children are more likely to get a stable education and achieve more when they have a permanent residence
- Benefits to the community – vibrant neighbourhoods can emerge in areas with affordable housing
- Safety – affordable housing gives people the chance to get away from threats and criminal activity
- Economic multiplier – occupants of affordable housing will spend money in local shops and on local services
Workers in affordable housing may even pay more taxes to the Government. Everybody wins with affordable housing.
The Government is currently reforming the planning system around new developments. It is not clear yet how it will affect the provision of affordable housing. We wrote an article about it that you can read here.
Rather than jumping between short-term solutions that create uncertainty for struggling renters and landlords alike, we need to think more long-term.
More homes are the answer to homelessness. Affordable homes are the answer for people who cannot afford to escape the cycle of renting. We hope the Coronavirus situation will provide a wake-up call for the entire industry, that something must be done.