property investment

After a similar move in Scotland, the eviction ban has been extended in England and Wales. This means that bailiff enforced evictions of private tenants will be banned until at least the 21st of February 2021. There are serious fears that the UK private rental sector is on the verge of collapse. Many private landlords are surviving on minimal rental income, while others have received nothing during the Covid pandemic. 

Will the government ever join up the dots? 

When reading the recent changes to English and Welsh eviction regulations, you will probably note that the landlord/agent can still take court action. If a tenant is more than six months in rental arrears they are quite entitled to take them to court, seeking eviction. However, even a successful eviction notice cannot be enforced by bailiffs and is in reality worthless. 

While we continue to hear of financial assistance for tenants, there is still no direct assistance for private landlords. Yes, critics will point to the opportunity to take a “mortgage holiday” but these missed payments still need to be paid, with additional interest. There seems to be a common misconception that the average private landlord has a huge portfolio of rental properties, and a wealth beyond many of our dreams. This is simply not the case! 

Clearing tenant rental arrears 

The UK government has provided a range of financial support for many tenants and those struggling on reduced income. Universal credit benefits are paid direct to the claimant, and in many cases now include new funding for rent. Unfortunately, it seems that some tenants are not passing on these payments to their landlords – in the knowledge they cannot be evicted. So, while rental arrears continues to rack up, landlords have their hands tied and are unable to take any real action. Surely, it would make sense to pay rental benefits direct to the landlord? 

We can only estimate the huge level of rental arrears in the private rental market. We can only estimate the huge number of “mortgage holidays” forced on private landlords. Those who believe that the UK private rental market will emerge from the Covid pandemic unscathed are deluded. Many private landlords have already begun to withdraw from the market. 

Now let us consider the huge sell-off of social housing during the 1980s, 1990s and the turn-of-the-century. This has left councils and housing associations with minimal housing stock, nowhere near enough to fill the emerging shortfall as private rental numbers fall. 

Are private landlords the victim of political correctness? 

In years gone by, the Conservative party was seen as the mouthpiece of capitalism and entrepreneurship. Indeed, successive Conservative governments have encouraged investment in the private rental market. However, as soon as government coffers began to run low, political correctness ran wild and private landlords suddenly became public enemy number one. This prompts the question, are private landlords the victim of political correctness gone mad? 

If not, why has the Conservative government not lifted a finger, or offered a pound in financial assistance for private landlords? 

Summary 

It really is difficult to understand why politicians seem so reluctant to offer any degree of financial assistance to private landlords. Let’s not forget, these are property investors who have been fleeced in recent years with additional taxes, regulations and expenses. The common misconception that the average private landlord has a huge portfolio bears no relevance to reality. 

Many private landlords have now used up their savings, continue to rack up huge mortgage arrears with a growing number in serious financial trouble. When will the politicians finally acknowledge this dire and desperate situation?

 

 

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