COVID-19 in the UK: emergency legislation for renters

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The government has confirmed it will bring forward emergency legislation to protect residential tenants from eviction. Following the Budget which announced mortgage “holidays” for those who own their homes, the government has been urged to assist private renters impacted by COVID-19.

Under the emergency legislation landlords will be unable to start proceedings to obtain possession of their property for at least three months. All new evictions will be suspended and no new possession proceedings will be permitted “during the period of national emergency”.

While the government’s intention is clear, there are many unanswered questions on the scope and nature of the changes. The Prime Minister has stated that they will avoid “pass[ing] on the problem” by “taking steps to protect other actors in the economy”. The move will have far reaching consequences for institutional investors in the private rental market and it is not clear what these protective steps will be.

The National Housing Federation, which represents housing associations in England, has also confirmed that housing associations will not evict tenants who are affected by COVID-19 and are unable to pay their rent.

There are many practical questions including how this will be implemented, documented  and policed. Landlords in the PRS sector may have a mixed response to this new plan. The government has confirmed that the three month mortgage payment “holiday” would be extended to landlords whose tenants are experiencing COVID-19 related financial problems but this move will not benefit institutional investors if they own the properties being rented. The government’s intention is to protect tenants whose incomes are affected by COVID-19 and also to protect landlords facing financial pressures if their rental payments dry up, but balancing the two is no easy task, especially when the government has so many conflicting demands on its agenda.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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