The homelessness reduction bill is currently being read in parliament. Whilst it is a bill that I think has grounds for being absolutely amazing, no one should have to sleep on the streets. The new amendments could spell trouble for Landlords.
What is the homelessness reduction bill?
This new bill will force Councils to tackle homelessness in the UK. The idea is that more people will have access to help before they loose their home.
At the moment the threat of homelessness is considered a problem 28 days before it is likely that homelessness could occur. However this bill wants to change that to 56 days. Therefore if a person feels they could become homeless they can approach the council 56 days prior to this happening for help. The obligation is then for the Council to do something about it.
Furthermore, in a previous drafting of this bill, there was one really exciting change:
“A person in respect of whom a valid notice under section 21 of the Housing Act 1988 has been given is to be treated as homeless from the date on which that notice expires”
This would force Councils to take a responsibility for anyone who was about to be evicted from their home, on expiry of a section 21 (or section 8). At this point the person would be classed as homeless.
Local Council’s Advice for Tenants Facing Section 21 Expiry
Shockingly, Councils are not advocates for tenants vacating property on the expiry of a section 21 notice (or section 8). Instead, their stance is for tenants to wait in the property until eviction day via bailiffs. This is because it can take months for Landlords to obtain a warrant to be able to do this. Therefore, the persons needs from the council are postponed indefinitely.
The NLA (National Landlord’s Association) reports that around 40% of all claims for possession by a private Landlord go all the way to bailiff repossession.
The worst thing about this is that it is a super expensive process for a Landlord. A Landlord could end up not getting any rental income for a long time (on average 45 weeks). Then have to shell out for legal fees. In turn, this impacts upon their ability to pay their mortgage… it’s disastrous on all counts.
However, it was anticipated that the new Homelessness Reduction Bill was going to change all of that, however…
The Redrafting Problem
Here’s the problem, the final draft of the Homelessness Reduction Bill has had definitions added.
The definitions state that the Council can look at whether it is financially reasonable and the consequences of the eviction. Then they can decide whether the tenant should stay on in the property after the possession notice has expired. Therefore, giving the Council’s the ability to decide upon when the person becomes defined as ‘Homeless’.
So What’s Next…
This was to be a massive hurrah for Landlords as Councils were going to be made to take charge over Homelessness. Also, Landlords could sleep easily knowing that possession on notice expiry wasn’t such a daunting task.
However, it seems that Councils still have the power. And really that means leaving private sector Landlords with the burden of looking after poorly behaved tenants.
Perhaps what the Government really need to be doing is looking at providing more funding and support for Homelessness. How about also adjusting planning policy so that developers and investors have an easier route into development and making sure that they provide housing for homeless people, or housing for councils so that they can support homelessness better?
This could have been an awesome bill, but it looks like not a lot is changing for the better for Landlords. Do you agree or do you see something different in this? Your comments are always most welcome! Don’t forget to share this around so that other Landlords benefit from the info.
NC
