The Impact of the End of Furlough on Rent Arrears And Possession Proceedings
Landlord and tenant news
Some say that it is the perfect storm; the end of the furlough scheme and at the same time generation rent facing a hike in prices for basic food shopping as well as gas and electricity price rises. Head of the landlord and tenant team, Nollienne Alparaque, has seen a recent rise in enquiries from tenants looking to get out of their tenancy agreements because of affordability and landlords anxious that if their tenants don’t pay the rent then they, in turn, can't pay the mortgage. It isn’t easy, especially when landlords are sympathetic to tenants who are struggling with the end of furlough whilst also frustrated that they can't always easily and quickly get a possession order when they think a tenant is using COVID-19 as an excuse to not pay their rent.
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For an initial consultation or advice on any aspect of landlord and tenant law call the expert London landlord and tenant lawyers at OTS Solicitors on 0203 959 9123 or contact us online.
Renters and the end of furlough
Furlough is due to end shortly. The end of furlough coincides with the government announcement that the universal credit recipients will cease to receive the temporary £20 payment and that housing benefits are frozen. If that was not enough, the UK is heading into winter with uncertainty about when vaccine boosters will be rolled out and to whom.
Many renters who share accommodation have contacted us because their fellow tenant has lost his or her employment and they therefore can't afford to continue to remain in the rented accommodation based on one wage alone. Renters are asking for landlord and tenant legal advice on whether they can get out of their tenancy agreement early.
Can a tenant end their tenancy agreement early?
At OTS Solicitors, Nollienne Alparaque believes it is important that landlord and tenant legal advice not only looks at the law but also the practicalities so whilst a tenant may not legally be able to get out of their tenancy agreement early both a landlord and tenant should look at the practicalities such as:
- If the tenancy agreement is not surrendered early does the landlord have insurance in place that will cover the loss of rent?
- If the tenancy agreement is surrendered early will the landlord be able to let the rental property out to a new tenant who can pay the rent?
- If the tenancy agreement is not surrendered and the rent is not paid does the tenant have the means to pay the rent arrears if they don’t have assets or an income coming in ? Is it therefore better for the landlord to agree to forgo the rent that they would otherwise be entitled to in order to quickly secure possession?
- If a tenant is willing to end the tenancy agreement early, is it better to accept that now rather than risk the tenant changing their mind and then the landlord having to start possession proceedings?
- Will rent debts be covered by the tenant’s deposit or has the property recently been inspected and is it clear that the deposit will potentially be the subject of a deposit dispute because of damage to the property, above and beyond normal wear and tear?
When a landlord or tenant are asking themselves these sorts of questions, they need to be aware that according to the Bank of England renters are more likely than any other group to have lost their employment or have experienced furlough. In addition, the National Residential Landlords Association says the percentage of private tenants in arrears has increased threefold from 2019 - 2020 to late 2020, with the statistics going from three percent of renters in arrears to nine percent. That is dangerously close to nearly a tenth of all tenants.
The National Residential Landlords Association has asked the government to provide an interest free government guaranteed hardship loan to help support tenants with COVID-19 related rent arrears who do not qualify for housing benefit or other forms of support. Th argument is that by providing help to the tenants this in turn helps UK landlords, many of whom have mortgages to pay on their rental property or who are reliant on their modest portfolio of rental properties to provide their retirement income in lieu of decent pension returns. Nollienne Alparaque is realistic enough to know that change isn’t likely to happen fast and, in the meantime, both landlords and tenants will face the quandary of what to do about either ending tenancy agreements early or starting county court possession proceedings.
In many situations, an initial consultation with a landlord and tenant solicitor will help a landlord or tenant understand their legal rights and responsibilities and give them sufficient advice on their best legal and practical options.
UK Online and London Based Landlord and Tenant Solicitors
For advice on rent arrears and possession proceedings or any other aspect of landlord and tenant law call the expert London landlord and tenant lawyers at OTS Solicitors on 0203 959 9123 or contact us online by completing our online enquiry form .