Ongoing concerns over the eviction ban

Government's 'u turn' decision to extend the eviction ban continues to cause concern. The Green Homes Grant scheme has now launched, what's involved in the application? Positive news for landlords and letting agents as rental demand continues into August.;
Eviction ban decision

The governments ‘u turn’ decision to extend the eviction ban for a further four weeks, continues to cause concern and disappointment for many.

New data presented by Shelter, indicates that 322,000 people had fallen behind their rent in the UK since the pandemic began in March.

However, tenants in Wales can now apply and borrow money to cover rent arrears, with the help of the Tenant Saver Loan scheme.

Various housing charities and groups representing landlords and letting agents have called for the government to introduce similar measures in England, such as an interest free loan or grant that will help tenants pay their rent.

Unsustainable

The National Residential Landlords Association (NRLA) have warned that some landlords could face two years without rental payments from tenants, due to the government’s decision.

As a result, the NRLA have composed a letter to the prime minister encouraging the government to review the ‘unsustainable decision’, particularly as it was announced that repossession cases based on rent arrears, would only be treated as a priority if tenants have accumulated at least 12 months’ worth of rent debts.

The letter points out the potential long-term impacts that a continued extension ban could have on landlords and their tenants.

They suggest that government’s failure to support landlords financially, could force them to pursue money claims against their tenants that are in rent arrears, which would have a serious impact on their credit score.

They also identify that a loss in rental income could ‘expose’ landlords to legal action if they cannot meet requirements within their property, or even cause landlords to default on their mortgages.

In the future, this experience could cause some landlords to be more selective about who they rent to, making it a harder process for renters to secure a property.

Next steps

In the letter to Prime Minister, the NRLA explains that the ‘only acceptable way forward’ is:

“No further extension of the evictions ban.

“Interest free, government guaranteed hardship loans for tenants to pay-off COVID related arrears as already introduced in Wales to sustain tenancies and remove any risk of eviction as furlough is removed. These should be paid directly to landlords and should cover all arrears accumulated since the start of the pandemic.

“Income support for landlords to cover arrears where affected tenants either refuse to apply for a loan or where loans are not best suited to them.”

They sign off the letter by apologising for writing in such terms, however they explain that landlords require urgent support and reassurance, and should not be ‘left to pick up the bill for the government’s failure to act fairly’.

How things stand

Despite the mounting rent arrears, new measures are yet to be proposed by the government in England, even though the eviction ban is supposedly coming to an end on 20th September 2020.

Notably, with the Furlough scheme expiring on 31st October 2020, landlords have been warned of a potential rent arrears spike as companies struggle to retain and pay employees.

In Scotland, the eviction ban is still set in place until at least March 2021, and there has been no announcement or proposed plans to introduce further steps to support landlords.

Applying for a Green Homes Grant

The Green Homes Grant scheme has now launched, enabling homeowners and landlords to apply for vouchers, towards the cost of energy efficient improvements to their properties

The Green Homes Grant was announced during Rishi Sunak’s Summer Statement. In a further update, from the government the Simple Energy Advice website was sign-posted as the route to application.

At the time of the update, there was no route to application on the site. However, this is now live.

Please be aware that Commercial Trust employee's cannot advise on the Green Homes Grant. Visit the Simple Energy Advice website, via the link below, for more information.

What is involved in an application?

Step 1. The first step in applying for a Green Homes Grant is to check your eligibility.

Eligibility questions for landlords include: 

  1. Is the property in England – only those that are in England are eligible.
  2. Whether you own the property – tenants can investigate possible improvements, that could be made by their landlord to the property they live in, but they cannot apply for GHG vouchers. Whereas, landlords and homeowners can apply for vouchers
  3.  Whether the property is a new build – new builds are not eligible for GHG vouchers


Step 2. The second step is to establish which improvements may be possible at the property.

You will be asked:

  1. 1. To input the property postcode, to identify the address and current EPC certificate energy rating.
  2. How many floors the property has, so that the size of the property can be estimated, which feeds in to the calculation of estimated costs for potential work.
  3. The age of the building. This is to determine which building regulations were in place at the time of construction. This will have implications for work that may be appropriate at the property.
  4. Details about the construction:
    a. The type of roof insulation
    b. The type of wall insulation
    c. The type of window glazing
  5. Floor insulation is asked for in a separate question
  6. The main fuel used for heating the property
  7. Whether there is a hot water cylinder at the property (these store water and are used in mains-pressure and gravity-based heating systems. If the property has a ‘combi’ boiler, there will be no hot water cylinder).
  8. Whether the boiler is condensing or not
  9. Timing of the heating being on/off (if known), during winter
  10. Whether there is a garden at the property and if yes, if it can be accessed by digging machinery (e.g. ground source heat pump systems would require this)
  11. Whether there is access at the property to an external wall, flat roof or other outside space (e.g. air source heat pumps would require this)
  12. Whether you are receiving benefits

Step 3. Getting quotes for relevant work

Once all these details have been completed, a summary of potential works is displayed. Work eligible for GHG vouchers is highlighted.

You can find out more about each proposed piece of work by adding it to a plan of works.

The plan can be downloaded in PDF format, which includes a list of GHG eligible local suppliers, who can help with the work and from whom you can secure quotes.

Step 4. Applying for vouchers

Whilst you can start securing quotes for work, you cannot as yet start applying for vouchers. The vouchers will start to be issued from the end of September.

Further announcements from the government will be made about applying, in the next couple of weeks.

Rental demand continues into August

The amount of people searching for a property to rent continues to exceed the rental supply across the UK.

Research conducted by Knight Frank, an Estate Agency based in London, shows that viewing figures for rental homes in London and Home Counties hit a ten-year high at the end of August.

They explain that part of the reason for this rise is due to wider behavioural shift, as renters reassess their housing needs and wants. Many people now require more outside space than before, likely due to the amount of time spent at home during the Covid-19 lockdown period.

Head of research at Knight Frank, Tom Bill, reveals that students accounted for approximately a quarter of the market, largely due to the uncertainty around the new academic year, which explains why enquiries picked up in comparison to July.

Beyond the student demand, Bill suggests that poorer rental values are the consequence of a strong supply of properties, as landlords decided not to sell during the pandemic.

Tenant demand highest ever on record

The ARLA Propertymark, reported a record-breaking month in rental demand for lettings agents in July 2020. As rental stock was the highest ever recorded, topping July’s 2017’s record.

Phil Keddie, President of ARLA Propertymark commented:

“Our latest figures show the rental market still continues to gather momentum following the reopening of housing markets across the UK.

"We have seen a record-breaking level of rental stock, and demand from tenants continues to grow, providing a positive outlook for the future of the private rented sector.

"For the market to fully recover from the Covid-19 pandemic, it is vital that landlords have good communication with their tenants, and that they continue to keep paying their rents, especially in light of rule changes and announcements impacting notice periods and additional government financial support being offered to tenants and landlords.”

Positive news for landlords

With the demand in rental properties, landlords are likely to experience shorter void periods between occupation of their rental properties.

ARLA Propertymark reveal that the average void period in the UK was just three weeks in July, down by an entire week compared to June, where properties were vacant for at least four weeks on average.

Needless to say, this will differ depending on the property and location. However, in areas of high demand void periods will likely be shorter.

This information should not be interpreted as financial advice. Mortgage and loan rates are subject to change.