A tsunami of evictions and homelessness is coming – unless the government acts

By Liz Davies

 At the start of the COVID-19 crisis, Robert Jenrick MP, Secretary of State for Housing, Communities and Local Government, said “No renter who has lost income due to coronavirus will be forced out of their home, nor will any landlord face unmanageable debts.”

The government acted through a moratorium on the Courts’ hearing of possession claims and on execution of warrants from 26th March 2020; extended notice periods for notices of intention to seek possession to three months; and encouraged landlords to adopt a flexible approach towards tenants in arrears.

Government guidance was issued that local authorities in England should accommodate all rough sleepers, or those at risk, regardless of priority need or eligibility, and funding was provided (Everyone in). Local housing allowance (LHA) was restored to the 30th percentile of market rents and extra money given for discretionary housing payments.

John Healey MP, Labour’s Shadow Secretary of State for Housing in March 2020, had called for these measures to be in place for six months, although the government’s initial intention was only for three months.

Very rapidly into lockdown, there were warnings about tenants facing severe financial difficulties. In May 2020, the House of Commons Housing, Communities and Local Government (HCLG) Committee heard witnesses predict a ‘tsunami’ of possession orders, and subsequent evictions, based on mandatory grounds for possession, that is, s.21 no fault evictions and Ground 8 possession orders (eight weeks’ arrears at the date of notice and at the date of the possession order).  Evidence from Citizens Advice estimated that around 2.6m private renters had already missed a rent payment or expected to do so at the beginning of April.

Over the summer, the government acted, often at the last-minute, to delay the prospect of evictions. In June 2020, as the moratorium was due to end, it was extended to 23rd August 2020.

In July 2020, Shelter calculated that 227,000 renters were at risk of eviction. As a result, by August, the concern about evictions had become a howl of protest, from housing campaigns, renters’ organisations, political parties, councils and even the British Medical Association.

On the last working day before Courts were to resume on 24th August 2020, the moratorium was extended to 20 September. The following week, the government introduced legislation so that landlords must now, from 29th August 2020, give six months’ notice of any intention to claim possession under s.21 no fault or rent arrears of less than six months.

That gives some respite to renters facing eviction if their landlords had not served a notice before 29th August. Renters who were already facing possession before the moratorium on 26th March or whose landlords served valid three month notices during the moratorium can still be subject to a possession order. And those possession orders can still be made on mandatory grounds, in other words there is no opportunity for the Court to consider whether it is reasonable to make a possession order or whether it is appropriate to suspend a possession order (so that rent arrears are repaid over time and the tenant keeps his or her home).

Courts have been sitting since 21st September, but they are hearing cases slowly. Government has required any landlord bringing a possession claim to inform the Court what knowledge it has of the impact of coronavirus on the tenant. But this is mere window-dressing. It cannot amount to a defence to a clam for possession under s.21 (no fault eviction) or Ground 8 (eight weeks’ arrears) if the landlord has complied with the notice requirements.

The six month notice period, and slow resumption of possession claims and evictions, means that the predicted “tsunami” of evictions will most likely be seen from April 2021 onwards, as six month notices expire. This provides some hope for a tenant who has fallen into financial difficulties, but is able to recover and start to pay arrears. He or she, if served with a s.21 notice, might at least be able to persuade the landlord not to evict.

However, the economic consequences of lockdown are going to be as dire in the housing world as elsewhere. DWP figures show that, already by April 2020, six times as many people had claimed universal credit (1.5 million claims) than they had done in April 2019. This is the highest number of universal credit claimants since it was introduced in 2013. Around half of new universal credit claimants with mortgages stopped paying their mortgages, according to the Institute for Fiscal Studies. As of August 2020, Shelter calculated that 322,000 adult private renters who were not in arrears before March have since fallen behind in their rent and that, even by June, nearly 300,000 tenants had been contacted by their landlord and told to leave.

Extraordinarily, the government is refusing to provide a timetable for the abolition, leading to fear that s.21 will not be abolished at all. The Minister, Christopher Pincher MP, said in Parliament on 23rd September that the government’s manifesto commitment to abolish s.21 has been postponed until there is a “sensible and stable economic and social terrain” on which to carry the plans forward.

Labour has been pressing the government on the abolition of s.21, calling for tenants to be protected from eviction for six months (effectively implemented by the government by the requirement for six months’ notice) and for an opportunity to repay rent arrears over two years. These are sensible suggestions, which would make a difference. It has run into some controversy on early refusals to call for rent arrears to be waived.

Subsequent to the row in May, Generation Rent has published proposals for a Coronavirus Home Retention Scheme, similar to the government’s schemes for furlough and for support for the self-employed, which would compensate landlords for up to 80% of any lost income up to a maximum of £2,500 a month. Shelter calls for a Coronavirus Renters’ Relief Fund (a similar scheme but paid to the tenant to pay his or her rent). It is hard to see how, in a national emergency, a landlord losing 20% of rental income could be a breach of the landlord’s human rights (the right being the right to peaceful enjoyment of possessions, in the First Protocol of the European Convention of Human Rights).

Control of private rents would, of course, help private tenants to remain in their homes. The Labour Party promised powers to cap rents in its 2019 general election manifesto. Sadiq Khan has called for a London Private Rent Commission to examine rent controls, and have the power to cap rents in the meantime.

Real increases in benefit rates are needed urgently. The five week wait for universal credit should be abolished, as should be the appalling benefit cap – which had the ironic unintended effect of making some claimants poorer when housing benefit rates were increased – and the bedroom tax. The local housing allowance calculation applied to housing costs under housing benefit and universal credit should be reviewed and increased to cover more than the lowest third of local market rents.

Homelessness

If there is to be a “tsunami” of evictions in 2021, it will be accompanied by a huge rise in the numbers of homeless people.

The initial Everyone in guidance resulted in councils accommodating around 14,600 people. Crisis, the homelessness charity, said “It shows what you can do with money and organisation and an assertive approach from government.” But, despite the initial success, there were still people sleeping rough over the summer and now into the autumn and winter, many of whom lost insecure accommodation during lockdown. Many of those have No Recourse to Public Funds (NRPF), and so are not normally entitled to homelessness help from councils.  The government is reinstating winter night shelters, signalling that that is the only help that rough sleepers should receive. There is also concern that the most unscrupulous landlords, whose tenants are often among the most vulnerable, are resorting to illegal evictions if rent is not paid.

Rough sleeping, and the other sorts of homelessness that are so often hidden such as sofa surfing or severely overcrowded accommodation, is deeply shaming for the sixth richest country in the world. It is also, now, a public health danger. The BMA has warned: “Unless the government continues to fund the placement of homeless people into suitable and safe accommodation, we could see large outbreaks amongst this population. This is particularly concerning considering the anticipated wave of newly homeless people as a direct result of COVID-19.” (BMA position statement on COVID-19 and homelessness in England)

A large coalition of housing campaigns, local authorities, health organisations and the HCLG Committee have called for the abolition or suspension of ‘no recourse to public funds’ (NRPF) conditions, so that benefit can be paid to renters and those provided with emergency accommodation.

Crisis have drafted legislation: Homelessness and the Prevention of Homelessness (COVID 19 Response) Bill. The draft bill provides that, for 12 months, local authorities continue to accommodate anyone with nowhere safe to stay, regardless of priority need or eligibility. They would be helped to find longer-term accommodation. NRPF conditions, the right to rent and other restrictions would be suspended, so accommodation costs could be paid through welfare benefits. The bill would make both s21 and Ground 8 discretionary and would require courts to consider coronavirus-related issues in all possession cases. It would also temporarily suspend the benefit cap. The draft legislation has been supported by over 40 other homelessness and migrant organisations (‘Open letter to the Prime Minister calling for emergency homelessness legislation’, Crisis, 7 July 2020).

Perhaps, in the breathing space provided by the six-month notice requirement, the government might listen and legislate to abolish s.21, to increase welfare benefits and to end homelessness.

 Liz Davies is a barrister specialising in housing and homelessness law and a member of New Forest West CLP.

Image: https://www.needpix.com/photo/download/405246/homeless-man-homeless-advice-orange-clothes-sign-orange-change-cup-charitable-look-down-on