Roadmap out of Covid restrictions

This week, England enjoyed the second step of the UK Government’s roadmap out of coronavirus restrictions, with outdoor dining allowed and non-essential retail reopened.

As restrictions on social contact and business activity begin to lift, the Government has also indicated that emergency measures in the private rented sector will start to taper off from 1 June – as long as there are no further setbacks in lifting lockdown measures.

The NRLA has been working on what this tapering should look like – and the interventions which are required to manage the backlog of cases facing the courts to provide landlords with confidence in the system.

This becomes even more essential as we look ahead to the abolition of Section 21 – so-called ‘no fault evictions – planned in the Renters’ Reform Bill, which will put further pressure on the justice system.

The current situation

For the private rented sector, Covid measures have focused on restricting possession – through longer notice periods on Section 21 and Section 8, prioritisation of cases in the courts instead of a first-come, first-served approach, and restrictions of enforcement of possession through limits on action by county court bailiffs and high court enforcement officers.

While there have been exceptions for the most serious cases – including antisocial behaviour and severe rent arrears – we know that many landlords’ claims remain ‘stuck in the system’, and many more cases which we would have expected in an average year haven’t yet reached the courts.

Research by the Resolution Foundation suggests that there is a significant risk of the courts being overwhelmed once possession restrictions lift, as they manage the average caseload, the backlog of cases due to the pandemic, and the additional rent arrears cases which have arisen from the impact of Covid on tenants’ incomes.

In light of this, this week, the NRLA shared with Ministers our proposed roadmap for the private rented sector.

Roadmap for the private rented sector

Our proposals are aimed at managing the caseload of the courts, through reducing rent debt and progressively ending emergency measures, and enabling the sector to return to a level footing ahead of the planned changes to possession through the Renters’ Reform Bill.

Tackling rent debts

Key to reducing the burden on the courts is targeted financial support for those tenants and landlords who are facing rent arrears due to the impact of the pandemic. Our research suggests more than 800,000 tenants have built arrears since last March, despite the support packages the UK Government has put in place.

We, together with others in the sector, have therefore been calling for a package of support specifically for rent arrears. Last month, we shared our proposal for a government-backed loan scheme, with payment directly to landlord, and income-contingent, interest-free repayments from tenants over an extended period.

This, alongside dedicated grant funding for those in receipt of benefits, would help sustain tenancies, reducing the potential burden on the courts, whilst also providing direct financial support into the private rented sector to reduce the pressure on individual landlords.

Get courts operating more efficiently

Even prior to the pandemic, the courts were struggling. It took on average around five months between a claim being made to court and enforcement. Since the closure of the courts last year, and the subsequent restrictions on possession, the length of that process has spiked. It now takes on average a year.

In help the courts cope with the level of demand, we are calling for new initiatives:

• Allowing virtual hearings of possession cases – the Covid restrictions in court have reduced court capacity and caused further delays. Making better use of video technology – already used in other parts of the justice system – would reduce the reliance on bricks and mortar and better facilitate access to justice
• Consistent definition of serious rent arrears – the UK Government has allowed shorter notice for Section 8 ground 8 claims where there are six months’ or more arrears, recognising the impact this has on landlords and their businesses, and the likelihood that arrears at this level were building pre-Covid. The courts, however, have defined serious arrears as at least 12 months’ rent, or 9 months’ where this is more than a quarter of the landlord’s annual income. A clear and consistent approach is essential and we are calling for the courts to align with the level required for reduced notice.
• Prioritisation of pre-Covid cases – landlords who were granted a possession order prior to restrictions beginning on 26  March 2020, but have not been able to secure a warrant for possession to enforce the order should have priority. These cases are not related to the pandemic and it must be urgently addressed.

Tapering down notice periods

Alongside changes in the courts, we are calling for the notice periods for Section 21 and Section 8 to begin tapering down as soon as possible. The Government has indicated this should happen once the current restrictions on enforcement lift on 1 June – and there can be no further delay.

A progressive reduction in notice periods will help to ensure the most serious cases are heard most quickly by avoiding immediately overwhelming the courts. It also should not encourage a significant delay in serving notice in order to benefit from a shorter notice period in the future, or incentivise the re-serving of any notices already issued. Together, these will help to manage court capacity so that cases can progress more quickly.