A new Bill was published to tackle homelessness, and it contains good news for landlords.
The Private Members’ Bill, introduced by Conservative MP Bob Blackman, has been welcomed by the Communities & Local Government Select Committee in its recent report into homelessness. The Committee will now undertake pre-legislative scrutiny of the Bill, and the NLA has provided written evidence in support of the Bill.
Increasingly, local authorities are advising tenants who receive a valid Section 21 notice to remain in the property until evicted by bailiffs, or else they will be deemed to have made themselves intentionally homeless.
The Mortgage and Landlord Possession Statistics released by the Ministry of Justice earlier this year highlight a growing problem in the private rented sector. Over the past 12 months, 40% of possession claims from private landlords have had to go all the way to repossession by bailiff with the average time of this process taking 45 weeks. This is a stark rise from just 25% of claims in the same period 5 years ago.
This has done financial damage to landlords and tenants, as well as causing landlords to become more reluctant to let their properties to formerly homeless or vulnerable households.
Recent NLA research has shown that 1 in 5 landlords have had a tenant advised to remain in the property until evicted by bailiffs. Half of these landlords had property damage as a result, at a cost of just under £2000.
Overall, the average cost of the tenant being advised to remain in the property was just over £6,750, through property damage, lost rest, court and legal fees.
For many years the NLA have been campaigning for a law change to ensure that local authorities have to accept a valid Section 21 possession notice as evidence that an applicant is threatened with homelessness.
So far the Government has been reluctant to act, having only gone so far as writing to English councils to clarify homelessness guidance. Despite this letter, local authorities are continuing the practice of advising tenants to ignore eviction notices until the bailiffs turn up to evict them.
The NLA has consistently warned that putting vulnerable households in this position is detrimental to both landlords and tenants alike. Tenants often accrue further rent arrears and other associated costs that make them more susceptible to homelessness, while landlords could fall behind on mortgage payments as they are dragged through a lengthy and costly court process.
As a result, landlords are becoming more reluctant to let out their property to vulnerable households as their confidence in their ability to regain possession is diminished.
This is especially damaging as local authorities are increasingly looking to use the PRS to discharge their homelessness duties due to a lack of social housing.
The Homelessness Reduction Bill amends the Housing Act 1996 in a number of ways to expand councils’ homelessness duties, installing a new focus on prevention. Importantly for landlords, this includes:
- Providing that valid Section 21 notices are proof an applicant is threatened with homelessness
- Doubling the definition of threatened with homelessness from 28 to 56 days.
Councils will have to respond to the threat of homelessness at a much earlier point, allowing for a greater chance of success in mediating with private landlords, assisting with rent arrears and debt management.
By ensuring that councils accept Section 21 notices as evidence of homelessness, this Bill will take strain off of overstretched courts, ensure that tenants are properly supported by their local councils, and provide landlords with the confidence they need to let their property out to riskier tenants.