Inquiry into the impact of COVID-19 (Coronavirus) on homelessness and the private rented sector

ARLA Propertymark has responded to the UK Parliament’s Housing, Communities and Local Government Committee’s (HCLG) Inquiry into the impact of Coronavirus on homelessness and the private rented sector.

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The aim of the committee’s inquiry is to examine how effective the UK Government has been in supporting individuals in the private rented sector. It also considers what long term strategies would need to be put in place for support once current measures expire.

We highlighted the positive steps the Government has taken to support the sector during the pandemic such as extending business rates relief and including commission in furloughed pay. However, our concerns remain about access to support for agents who are self-employed and the disparity in how the Small Business Support Grants are being administered by different local authorities across the country.

For renters, the concern remains that while general awareness of the Government’s policies aimed at helping renters is modest, actual knowledge of the policies among renters is low.

Action is needed

Support for self-employed agents - Some Limited company directors and small businesses have fallen between the Government’s economic support packages. To support this segment of the employment market the Government could ask company directors to self-report their average dividend income in order to obtain a similar measure of support to the 80 per cent of income that self-employed and PAYE workers can access. Furthermore, agents who are self-employed had to have filed their 2018-19 tax return by 23 April 2020 to receive support under the Self-employment Income Support Scheme. However, if they had more recently become self-employed, such as from April 2019 it is not clear what support is available. In addition, payments will not be made until June 2020 which means three months of no income when many agents continue to have bills and overheads to pay.

Improve renters' knowledge of support - There is lots of Government support available that should allow tenants to continue to pay their rent and landlords to have an income if rent payments do stop. However, not enough is being done to explain and highlight these policies. In order that rent payments continue to be paid and the Government keep the rent flowing, renters and their landlords need to take full advantage of the Government schemes available during this difficult period.

Current issues

Suspend the introduction of mandatory electrical checks - With the added complications of Coronavirus, the supply chain capacity issues have got significantly worse, and therefore, the Government should suspend the introduction until such time as it is possible for the industry to practically implement the legislation.

Review and update guidance on maintenance and safety checks - 70 per cent of agents who Propertymark surveyed said that the Government’s guidance on what to do for compliance checks during the outbreak is clear and helpful. However, agents are facing problems getting routine maintenance and safety checks at the properties they manage completed. Agents and landlords want to do the best by their tenants and are understandably nervous about falling foul of regulations and therefore, we ask the Government to review and update the guidance already issued.

Post lockdown

Provide more support on rent payments - Survey results from Propertymark members show that nearly all have said that up to a quarter of their tenants have missed a rental payment since the Coronavirus outbreak. Consequently, three things need to happen to further assist renters. Firstly, more needs to be done to explain the support available from the Government. Secondly, the Government must suspend the five weeks Universal Credit payment period with all payments made in full and paid directly to the letting agent or landlord. Thirdly, for those tenants who fall through the gaps in the Government’s current provisions should be able to apply for their rent to be paid via Universal Credit.

Postpone the introduction of all licensing schemes - Members are alarmed that a number of Councils are ignoring guidance issued by the Ministry of Housing, Communities and Local Government which says that where local authorities are in the process of introducing non-mandatory licensing schemes, but these are not yet in force, they should consider pausing these at an appropriate point, in line with the advice on proactive and reactive work. The Government must ensure local authorities postpone the introduction of all licensing schemes until the market can recover from the impacts of COVID-19.

Separate rent arrears before and during the pandemic - Propertymark’s survey figures from members show that for the majority (78 per cent) the passing of legislation to delay eviction proceedings has impacted on up to ten tenancies they manage and between ten and 20 tenancies for 13 per cent of agents. Members are concerned about the speed in which cases will be able to be heard in the courts and the backlog of cases from before the Coronavirus Act was passed and those cases lodged during the outbreak and after the restrictions are lifted. 

Read our full response