Homelessness Reduction Bill changed and it’s bad news for landlords

Homelessness Reduction Bill changed and it’s bad news for landlords

The final version of Bob Blackman MP’s Homelessness Reduction Bill has been published ahead of its 2nd Reading in Parliament. In complete contrast to previous versions, and the report by Crisis that preceded it, the final version delivers a kicking to landlords.

The NLA had been provisionally supportive of the previous draft of the Bill because it included one very welcome change to the Housing Act 1996:

“A person in respect of whom a valid notice under section 21 of the Housing Act 1988 (…..) has been given is to be treated as homeless from the date on which that notice expires”.

This one sentence amendment would have stopped councils’ damaging policy to advise tenants to stay in the property until evicted by bailiffs if served with a valid section 21 notice.

However, the new version extends this out with two pages of sub-clauses, stating that such tenants should be treated as homeless UNLESS a relevant local housing authority asks them to stay put.

It goes on to say that the tenant may not overstay a court order, but that the local housing authority must only consider the likely consequences / financial harm to the interested parties.

In essence this is the opposite of what we supported previously as it legitimises and encourages a practice which currently contradicts the government’s guidance.

The Mortgage and Landlord Possession Statistics released by the Ministry of Justice earlier this year show the growing trend 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.

If the Bill gets passed, and councils are actively encouraged to continue this behaviour, we’ll be likely to see this increase further still.

The Damage

Our regular Tenant Panel recently found that almost half (48%) of tenants who have received a Section 21 notice were advised by their council to stay put until the bailiffs turned up.

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.By legitimising this policy the Bill will make it harder for local authorities to discharge their homelessness duties into the PRS.

NLA research has also 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.

Will it Pass?

Private Members’ Bills (those introduced by backbench MPs) such as this one are rarely passed – the hurdles to overcome are numerous.

However, the charity Crisis has been lobbying MPs hard to get them to turn up on Friday 28th October so the Bill can get through its next stage and it has cross-party support. Even Labour leader Jeremy Corbyn has written to all Labour MPs encouraging them to attend the debate and vote in favour of the Bill. The Government may also give its backing to the Bill.

UPDATE: Communities Secretary Sajid Javid has announced that the Government will support Bob Blackman’s Homelessness Reduction Bill

The Bill is picking up quite a bit of steam. Even if it doesn’t pass, popular Private Members’ Bills can be rolled into other Bills by the Government if it wishes.

After all, the Retaliatory Evictions Bill failed to pass initially, but then it was picked up by the Government and rolled into the Deregulation Act 2015….

Suffice to say, the final version of the Bill is not supported by us and we believe it will lead to increased costs to landlords, and ultimately less housing stock available to house the homeless.

13 thoughts on “Homelessness Reduction Bill changed and it’s bad news for landlords

  1. If the council is telling the tenant to stay put, can the rent payment/loss issues be transferred onto the council? I.e. The council needs to give the tenant a formal notice to stay put and so takes on the responsibility for loss of rent/damage during the period from end of s21 notice to the point of the baliffs arriving on the door.

    Can we have this added to the act?

  2. Well, cue letter to my (Labour) MP. I’ll be telling him that if this passes, then it will automatically cause more homelessness – not less.
    As it stands, I’ve been “flexible” in the past with tenants – but with a law like this on the books I’ll have no option but to be very strict and start proceedings as soon as there’s any hint of a problem.

  3. More idiocy from this stupid MP putting a pathetic private bill through which does nothing to prevent wrongun tenants from abusing the not fit for purpose eviction process.
    Why are MPs so thick!?
    It is obvious to any intelligent person that the best way to encourage LL to take on dodgy tenants is to ensure immediate eviction in the event of rent arrears only.
    This works well in Australia where police will remove a tenant if requested by the LL if 14 days in rent arrears.
    Consequently few tenants have any difficulty sourcing tenancies as LL know they may quickly get rid of tenants who fail to pay the contractual rent for whatever reason.
    Such a system would work very effectively in the UK and would prevent the 45 eviction period which causes massive losses to LL and causes many LL to refuse to take on dodgy tenants.

  4. Does legislation ever pass onto the statute books where the potential (possible) implications have been thoroughly looked into? (I for one sincerely doubt it)

  5. For year’s the Government of both parties has considered landlords as fair game. The continued exploitation is so transparently obvious in it’s blatant intention of forcing private landlords to cover substantial amounts of the costs of caring for the homeless that it can only be considered as an underhand and immoral tax on landlords’ incomes.

    That the Government and councils not only condones, but actively supports some unscrupulous tenants in the witholding of rent’s that have been legally contracted into is a disgrace. Damage done to landlord’s properties due to the action of a not insignificant number of tenants is considered to be , not only the landlord’s problem, but also the landlord’s fault for not being more diligent in assessing the tenant.

    For many year’s I intentionally rented my properties to those on benefits, intentionally at rent’s lower than those of similar specifications in the locality, for 10 years or so I invariably had substantial reduced income or substantial losses due to unpaid rents and the repair of damage with the result that I, as I suspect many landlord’s have been forced to now refuse to accept potential tenant’s on benefits and to insist on guarantees as well as taking out more insurance against loss of income. This can only increase the costs of rent and further create a shortage of property available for the more vunerable of society.

    There are bad and atrocious landlords and councils and Government has the power, but apparentIy not the wish to seriously discourage bad landlords through a rigorous enforcement of the law, perhaps with the confiscation of properties for the most serious consistent offenders which councils could renovate and use to house the tenants who have caused the most damage or have been repeat and habitual rent evaders. such should also be accompanied by a more robust enforcement of the rights of landlords to evict unruly or non paying tenants.

  6. Having read the bill, it appears that the intent is that the LHA may only advise the tenant to stay if
    a) They believe that the landlord would not gain possession in a court hearing (I imagine that the S21/S8 notice is incorrectly served, or possibly some discretionary ground), or
    b) They have discussed the situation with the landlord and believe that she does not intend enforcing the notice.

    If that is the intent, then it does not appear to be a problem.
    HOWEVER, I don’t know if that IS the intent, or if that IS what the bill actually says.

  7. I have gone through this, and will shortly again, universal credit has meant that a Hereto good tenant of 3 years has just lost £500 a month housing benefit due to the cap, she is registering as a carer for her mum and in theory as carers who claim carers allowance are exempt she will be ok. Otherwise she will be scrambling for a job …. Very difficult. She will not qualify for rehousing as housing benefit regard non payment of rent as making herself homeless….The first month of arrears I will give her notice.

    In the past where this has happened, where a perfectly good benefit tenant of a year, (I checked the house once every month due to her son having cracked an electrical socket). However she had her life turned upside down by a drug growing and dealing boyfriend who also went on to breed dogs in her kitchen… She subsequently got into drugs, the kids went into care and the police pounced… I was facing a long drawn out court to bailiff situation, she knew she would not qualify for rehousing, she was offered to move up north to family. She signed a relinquishment of the property, signed she was dumping her belonging img and furniture, (saved me storing it), I paid her a ‘ removal fee’ to cover the train ticket, she walked out with a carrier bag. It cost 7k to repair the house and it was relet within a month. The boiler repair alone was £500. The council contributed £700 in the form of a bond she had. The housing officer was angry that I had paid her what she had asked, (£150). They checked what I had done with their legal dept, who said I had not done a thing wrong. The housing officer ranted that it should have gone to court and bailiff. (😱) …
    If it had, that would have been £7k + whatever else damage was added until bailiffs got her out 6 months or so later.. Plus the 5-6k legal fees.

    Ok it was a steep learning curve, but there was early release. Sometimes even the best checked tenants do crazy things, all sorts of awful things happen to some people. But this is one strategy I have deployed to get things rerouted again making the best of a bad situation.

  8. Historically, my main market has been the unemployed /DSS
    as I like to help people. However, the impact of clause 24, increased issues with tenants thinking they can do what they want and nonsense potential legislation like this, has caused me to rethink my business model beyond the point of no return. Without a doubt there is a much greater risk to homelessness when there are less landlords operating at the harder end of the market, why does the government or shelter even not see this??

  9. Surely this leaves the council liable for any rent and any damages caused by the tenant as they are acting as advisers/agents for the tenant accepting responsibility for the tenant staying in the property.????

  10. A letter sent to Shelter regarding this matter

    Dear Shelter,

    I am writing to find out why things are the way are at the moment as we and many of our landlords believe the system in place at the moment really is not fair at all. Let me give a few examples of why we believe this and hopefully you can give a little advice.

    We are part of a larger organisation and our branch deal with private rent in in South East London. As we all know the prices of renting in central London are fairly costly and as a result we need to work extremely hard and long hours to just be able to afford to rent a small place we can call home. We are dealing with a few cases now that a landlord has served notice for a particular reason such as the property is being sold or a landlord wants to move back in as they have a change in circumstances. They serve the required two periods (months in our case) notice and the tenants want to remain in the area. They start to look for a similar property in the area and they cannot find one in the budget they want to pay. They come to realise that they don’t earn sufficiently enough to be able to afford the area and the size of property they want. They aren’t willing to compromise on space price or location, like the rest of hard working people like the people working in the branch here, and the tenants then seek advice from their local borough who say if they want to then take up social housing they need to be threatened with homelessness. As we all know this then means a lengthy and very costly process to the Landlords to start the eviction process and more forward with claiming full vacant possession. The tenants then need to take the eviction notice to the local borough and the can then be considered for rehousing on social benefits in the area that they want and have the extra room they want.

    I’ll use two examples that we are currently dealing with clearly highlight the way this process isn’t actually helping the community and the economy.

    Example one: Tenant has been living in a property for over 4 years. They have renewed the rent at a lesser than market value as a private landlord would want a long standing tenant to remain. The landlord has now served the required two month notice to the tenant as he needs the property back. The tenant has mentioned she had found employment and was starting work. However she would call through at 15:30 on a Tuesday and say she wasn’t at work and had taken some time off again as she now had to look for a new place to live. Needless to say this job didn’t last very long as a result. She ideally is looking for a two bedroom property as this is what she currently has on a reduced rent due the longevity of the tenancy the rent is less than what others are paying in the area. She clearly has no real intention to find work and is not willing to compromise on space location and cannot on price. As a result she approached the local borough who advise her to remain in the property and the landlord will need to start accelerated possession proceedings through court. This is now costly to the landlord and prevents him from moving back to his property for a perfectly valid reason. This has now caused complete unnecessary costs and wasted time for everyone involved just because these people aren’t willing to look further out of London, find a job and commit to it and believe they are now entitled to these benefits as a result of them being lazy. This is one example of the social housing process being completely unfair to those people who work hard, pay taxes and national insurance and help those who can’t afford the hefty costs for deposits to buy and rent their property out. This particular case the landlord didn’t even have the option as he was sent overseas for work so he can continue paying taxes and national insurance contributions to only be disadvantaged by the system he is paying to.

    The second example: We have a property again where tenants have been there for a longer duration and are paying less than the market value for equivalent properties in the area. The landlord has an offer on the property and is coming to exchange. As one would expect notice needs to be served and full vacant possession confirmed for exchange and possession. The landlord once again serves notice in line with the regulations highlighted in the Housing Act and the tenants once again would like to remain in the area. They now see the prices are put of their budget and again approach the local borough who again advise the process of accelerated possession and the course of getting to the bailiff points to be threatened with homelessness. We have tried to speak to the tenants to say they need to compromise on space price or location and they won’t. This is why they have now started this process. This as a result is preventing the sale from exchanging as once again these people feel they are entitled to the benefit system.

    Then to highlight another case we are dealing with, a difficult break up of a couple and she wants to remain in the area but cannot afford it. She has been to the local borough who for once have found a place for her to move without going through the possession order process however the tenancy still has three months to run on a fixed term. The local borough contacted us yesterday to say either the landlord releases her early as they have a property for her this week or the landlord needs to go through the possession order process again. Once again providing fees to the local courts for the process and once again completely shaming the Housing Act and what a fixed term Assured Shorthold Tenancy is and just highlights that it actually isn’t worth the paper it written.

    Considering the hard working people who pay taxes and national insurance to be able to have access to a system when it I required is clearly being taken apart by people who believe entitlement is more important. Personally I would love to live in a small studio flat I can call my own in the area I currently live however I cannot afford it. As a result I compromise and live in flat share. For those in the branch who want their own small place that is exclusively there’s they then move outside of London and commute into work. My question is why do people such as myself and the entire honest working contingency of the UK work hard pay taxes and NI to then have the local boroughs giving these funds to those who feel entitled to it. Surely those who contribute to the system should be first to have access to these funds and those who aren’t contributing maybe contribute in a different manner. Maybe civil service in the army or helping in the community for so many hours a day. As sitting at home at 15:30 on a Tuesday complaining that they have no money but perfectly capable of working, just lazy not to, isn’t promoting a working nation.

    I hope you can understand the frustration on the matter as I spend my entire day working five days a week I pay my taxes, and a lot of tax at that, to only see this happening in front of my eyes really doesn’t give me much faith in the system at all and hence so many hard working, contributing people feel this is a system that benefits those who feel entitled but not willing to do anything to get it corrected.

    Please can you point me in the direction for me take this matter further as something needs to change and this needs to be heard.

    Kind regards

  11. Just gained possession of our flat from benefit tenant, he was young and we went out on a limb to help him. Problems started immediately with a dog ripping up carpets then subletting to squatter etc. He has not used any electricity in 9 months (pay as you go meter), how can you live with no cooking, washing etc !! £5k of damage!! What a prize for trying to help the lad! He and his family will not even help remove the rubbish despite the 10 yard walk to the refuse chute! Council promised to house the wretch but then changed their mind. We are selling the property ASAP. It is a simple choice with these proposals, go upmarket if you can or sell your property!!

  12. This is frightening for an accidental landlord. I just think it’s disgraceful for those who work hard and try to look after their families. The government doesn’t give a hoot about homelessness yet all they are doing is passing the buck to good landlords. The only option is to cover yourself then and raise the rent just in case you are faced with this scenario. Plenty of landlords are not rich. What about all the council properties that are being sold off?

  13. I used to be happy to support Shelter and send tenants information on advice on their websites, etc. After reading about tenants being given advice not to leave until bailiffs removed them. I will no longer support them, and no longer send tenants info on their website.

    Landlords have already faced enough blows by the government this year, Without the added costs of having to pay all of these extra fees.

    I’ve been mostly lucky up to now. But will now not consider DSS, etc. Future tenants will have to now pass all checks.

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