Summary
There will be emergency legislation to suspend new evictions from social or private rented residential accommodation during the COVID-19/coronavirus national emergency. No new possession proceedings through court applications will start during the emergency. Landlords will be protected by a 3 month mortgage payment holiday being extended to Buy to Let mortgages. The Government has also announced that those who benefit from the Government backed “Help to Buy” equity loan scheme will be offered interest payment holidays if they are struggling to pay because of COVID-19.
Detail
On 18 March 2020, the Government announced measures to protect landlords and tenants in the light of the COVID-19/coronavirus crisis. No tenant/renter in either social or private residential accommodation will be forced out of their home during the crisis.
Emergency legislation will be taken forward to ensure that landlords will not be able to start proceedings to evict tenants for at least a three-month period, with the intention of protecting tenants in social or private residential accommodation from eviction. It appears that the reference to eviction covers non fault based “section 21” routes to possession proceedings as well as “section 8” notices for non-payment of rent - this will have an unintentional consequence of capturing tenancies terminated for reasons unconnected with COVID-19.
There is protection for landlords in the form of a 3 month mortgage payment holiday reflecting difficulties landlords may face in being paid by their tenants.
At the end of this 3 month period, landlords and tenants are expected to work together to establish an affordable repayment plan for the tenant, taking into account tenants’ individual circumstances.
To support this announcement, the Government is widening the ‘pre-action protocol’ on possession proceedings to include private tenants and to strengthen its remit. This will support necessary engagement between landlords and tenants to resolve disputes. Landlords must reach out to tenants to understand their financial position.
The Government will issue guidance which asks landlords to show compassion and to allow affected tenants to remain in their homes wherever possible.
This protection for tenants in social or private rented residential accommodation comes off the back of the Government’s support for private mortgage holders. The Government has announced that homeowners affected by COVID-19 can apply for mortgage payment holidays of up to three months. Affected borrowers are asked to contact their lenders at the earliest possible opportunity and lenders will assess on a case by case basis. Where the borrower is in financial difficulty, lenders are expected to come to an arrangement with the borrower to put the borrower into a sustainable position on their mortgage and at the same time minimise the risk of repossession.
The Government has also announced that those who benefit from the Government backed “Help to Buy” equity loan scheme will be offered interest payment holidays if they are struggling to pay because of COVID-19.
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