The pandemic arrears crisis
Private landlord perspectives on the temporary legislation impacting the Private Rented Sector
The UK and Scottish Governments introduced a range of temporary legislation to prevent the pandemic leading to a surge in evictions in both the private rented sector (PRS) and the social rented sector. The legislation successfully protected tenants and sheltered public services from the additional pressures of responding to a potential surge in homelessness. However, the legislation has led to a substantial rise in landlord arrears. In effect, the legislation transferred some of the costs of the pandemic from individuals and public bodies onto private landlords.
Many of the temporary measures are not slated to expire until March 2022, around two years after some were introduced. The question now is how we ‘unwind’ this situation, navigating a return to more normal conditions in the Private Rented Sector (PRS) sector without leaving large numbers of tenants at high risk of eviction, and without leaving large numbers of landlords shouldering substantial pandemic arrears. The report identifies the volume and value of rental arrears; the arrears management approach adopted by landlords; landlord intentions regarding evictions; and landlord financial resilience levels. Drawing on these insights, the report suggests measures to try to release the tensions stored up by the temporary legislation. These include:
- Retain pre-action requirements to encourage better approaches to arrears management by private landlords who may otherwise rely too heavily on legal action.
- Return notice periods to the pre-pandemic situation at the end of March 2022 but retain Tribunal discretion in arrears cases to allow individual circumstances to be taken into account.
- Continue the provision of additional financial support for tenants offered by the Scottish Government but monitor demand closely as the scale of the fund (currently £10m) appears very small in comparison with the scale of rent arrears (estimated £126m).
The report will be of particular interest to policy makers, local authorities, membership, and third sector organisations.
Authors: Andrew Robert Watson and Prof Nick Bailey
Date: November 8, 2021 12:41 pm
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