Housing campaigners have sounded the alarm over government plans to make it easier for landlords to evict tenants who fall behind on their rent.
The government wants to change the law so that evictions can take place if someone repeatedly falls into arrears – even if they catch up on payments.
The plan, part of the Renters Reform Bill, comes as homelessness services brace for a surge in people falling behind on payments this winter due to skyrocketing energy prices.
Under the current rules a court will only grant a possession order to a landlord if their tenant is two months behind on their rent when their case is heard.
This gives time for tenants to make up lost rent ahead of the hearing, to avoid being made homeless.
But the government says this rule represents an “unfair financial burden on landlords” and proposes to change the rules to make them more strict.
Under the new law, which was lobbied for by landlords, courts will have to grant a possession order if someone falls significantly behind their rent three times in a three-year period – even if they are paid up when the case comes to court.
The government says it has come forward with the plan in response to concerns raised by landlords, and that it does not want them facing “undue burdens”.
“Landlords have raised concerns that some tenants pay off a small amount of arrears – taking them just below the mandatory repossession threshold of two months’ arrears (which must be demonstrated both at time of serving notice and hearing) – to avoid eviction at a court hearing," the government’s renting white paper says.
“Where tenants do this repeatedly it represents an unfair financial burden on landlords in lost rent and court costs and indicates that a tenancy may be unsustainable for a tenant.
“We will introduce a new mandatory ground for repeated serious arrears. Eviction will be mandatory where a tenant has been in at least two months’ rent arrears three times within the previous three years, regardless of the arrears balance at hearing.”
But Alicia Kennedy, director of the campaign group Generation Rent, told The Independent that some renters would find themselves in arrears “for reasons out of their control”.
“This is because they might be in precarious work such as zero-hours contracts, or be self-employed,” she said.
“Generation Rent do not support this new ground or any mandatory grounds for arrears.
“Renters get into arrears for many different reasons and should not be evicted for reasons outside their control such as due to the economic shocks from the pandemic or now the cost of living crisis.
“Therefore, all arrears’ grounds should be made discretionary to ensure that the situation and vulnerability of the renter is taken into account.”
The government’s renting bill also plans to abolish “no-fault” section 21 notices – a step regarded as positive by housing campaigners and widely welcomed by them.
But although that change will mean landlords will have to give a reason to end a tenancy, this is distinct from the process of going to court to get a possession order to physically eject tenants from a property. Currently, housing charities often advise people to remain in their homes until ordered out by a court, to avoid them being made homeless.
An analysis published by the London School of Economics and Political Science (LSE) and Trust for London in November 2021 warned that the number of people in arrears was expected to triple in 2022, affecting as many as 700,000.
The situation is expected to get even worse with pressures on incomes set to increase dramatically over the next few months. Energy bills for a typical household are expected to rise to £4,266 a year in spring 2023, according to figures from Cornwall Insight, up from £1,277 in April this year.
The government’s transition of the benefits system to Universal Credit has also driven a sharp increase in people on low incomes in rent arrears, due to a design flaw which delays payments and leaves people without money to cover rent.
One analysis by the Smith Institute think tank for London Councils, which looked at social tenants’ experiences, found that “for the majority of tenants the experience of claiming Universal Credit is accompanied by a significant increase in rent arrears”.
“Arrears rise sharply in the weeks immediately following a Universal Credit claim, before plateauing after approximately 12 weeks,” it found. “Although arrears generally stop increasing further, they do not get paid down, suggesting that the five-week wait creates a spike in claimant debt that they are then unable to pay off.”
A spokesperson for the London Renters Union, which organises tenants in the capital, said: “Rents in London and many parts of Britain have increased 15 per cent in the past year, and our members are reporting staggering rent rises of as much as 20 per cent, 30 per cent or even 50 per cent. Landlords and estate agents are clearly using the cost of living crisis as an excuse to squeeze tenants and boost profits.
“Every step that makes it easier to evict us makes life harder for millions and makes it less likely that renters will feel able to raise issues about dangerous disrepair.
“Rather than making it easier for landlords to evict renters who fall into debt, the government should introduce a freeze on rents to stop landlords and estate agents profiteering during this crisis.”
A Department for Levelling Up, Housing and Communities spokesperson said: “We know tenants can go into arrears through no fault of their own and should be given reasonable opportunities to repay them to avoid eviction.
“Our reforms will deliver a fairer deal for renters, bringing into law new measures to protect tenants by abolishing section 21 ‘no-fault’ evictions and empowering them to challenge poor practice, poor housing standards and unjustified rent increases.”
