On a recent Zoom meeting earlier in the week, participants from a range of different advice agencies were reporting from their zones on what they were seeing in terms of housing advice trends.
The much anticipated tsunami of illegal evictions by landlords due to the extended moratorium on the execution of warrants has so far failed to materialise.
Safer Renting who are directly plugged into this market also haven’t seen the expected rise. We have been seeing a massive rise in illegal evictions generally since March 2020 at around 60% on the same time last pre-lockdown year but we have to say, it’s still our usual suspects. The sorts of landlords and agents who never go near a court anyway.
You can tell by the way they set the lettings up, sham licence agreements, no written contracts, no receipts for rent, the usual depressing carnival of nonsense but so far, nothing from Timothy and Letitia and their one pension property who you might expect to see chancing their arm with conventional possession blocked and the rent arrears piling up.
Of course we don’t yet know whether government will extend the moratorium again come 21st Feb and we most probably wont know until the day before as usual, so I wouldn’t rule an increase out in illegal evictions just yet, such actions being predicted even by commentators within the conventional landlord community..
However, whilst the advice agencies and law centres on the Zoom meeting are similarly keeping a cautious and expectant eye on the market, what they did report was a marked increase in enquiries received from renters wanting to know how they can get out of their tenancy contracts.
People’s whose income has dropped so dramatically that they can no longer afford the rent and are either suffering sleepless nights over how long they can continue to pay, watching their debt stacking up or using savings to meet the rent.
Back in October I remember speaking to a self-employed travel agent colleague of my wife, who like many self-employed people worked 60 hour weeks and paid her taxes diligently for years, only to find, just like my wife, that the way she paid herself from her company made her one of the 3 million self-employed people left out of Rishi Sunak’s plans.
In this instance she was not only panicking but devastated, having had to use savings that she had been squirreling away for years as a deposit on her own house to pay the rent. A real life game of snakes and ladders.
I was intrigued to hear about this rising trend when blow me, just the very next day I was asked to talk to a student son of a friend in exactly the same predicament.
He took on a 12 month joint tenancy with 4 others in September, expecting the full uni experience to start again, only to find that all of his lessons are now being done online and the part time job he was working in dumped him because they had to close due to lockdown, leaving him struggling to pay his portion of the rent and unable to back out of the contract until September 2021 without dropping his housemates guarantor parents firmly in it.
There is no break clause in his contract and his housemates are happy to stay because their life circumstances are different to his. There was no mis selling or aggressive selling of the property that would allow him to unwind the tenancy and anyway, he is past the 90 day limit even if there was.
Even exercising his joint and several right to terminate the tenancy for all parties wouldn’t get them out of the booby trap built into fixed term tenancies, the ability of a landlord to pursue renter’s leaving early for the full amount of rent left on the fixed term..
Of course the housemates can, in the time honoured fashion, simple replace him with a lodger of their own but due to self -isolation, nobody is in any rush to sign up to move into a crowded house with a bunch of strangers , any such lodgers likely being students in that area and therefore also studying from home and realizing they don’t need to rent..
So my mate’s son has moved back in with his mum to save on food and bills but is still paying his portion of the rent for accommodation he cant afford to live in. The landlord isn’t likely to let him out of the contract for the same reasons mentioned above, finding other students at the current time.
Government, have done nothing about addressing the rent crisis other than to suggest that landlords and tenants try to cooperate and be understanding with each other and coming up with the idea of loans for tenants to help meet the arrears. Loans they will be paying off for years to come whilst the landlord still hangs onto their investment property.
This growing trend of renters being trapped in contracts they cant get out of and faced only with the possibility of leaving early and being pursued for massive rent debt or taking out a loan to stop the slide seem inordinately unfair to my mind.
I understand that landlords often still have mortgages to pay but lets not forget that last year, while renters were still expected to pay their rent, many landlords had mortgage holidays and in the longer term, why should renters have to take out loans to meet their rent when the alternative is for landlords to be offered a loan scheme to keep their investment going in the same way as any business owner has to do.
A report published last year by the NRLA compiled from the opinions of their members showed that the vast majority of their landlords saw what they were doing as investing, not providing homes per se.
When all this Covid stuff has long passed into a bad dream the property owners will still be successful investment property owners, while their renters will be paying off debts for years to come, further hampering any ability they might have to save for a home of their own, like my wife’s hard working friend, or just live a normal, relatively stress free life.
Covid, lockdown and self-isolation are nobody’s fault, not the landlord’s, not the tenant’s but the landlord lobby’s insistence on business as usual just seems way out of whack with the pandemic emergency and the sacrifices everyone else is forced to make.
Rent control? Well to be honest and it may surprise regular readers, I don’t actually have a firm opinion on it. There are many variants with arguments for and against. I haven’t made my mind up but loans for landlords to keep their business afloat? Yes, that seems morally right. Whilst government have been propping up (some) business owners it is only where mass unemployment would result if they didn’t.
I’m not even saying that renter’s shouldn’t pay their rent but only what they can reasonably afford without cutting back on food, clothing, heating etc and certainly without having to take out loans to prop up the landlord’s investment.
Any investment is a gamble and in that sense property speculation is no different from playing the stock market, prices go up and prices go down. Only landlords seem to demand guaranteed financial stability and expect the renter to pay for it.
Let renters pay what they can from their incomes at the moment and create a loan system for landlords to cover the shortfall and keep them afloat.
by Ben Reeve Lewis
