The impact COVID19 lockdown has had on the property market 27 Apr 2020
One month on…
Well, this is different. Instead of sitting at my computer and occasionally glancing out of my Horsley office window overlooking the uninspiring side elevation of Lloyds Bank, I am working from home and in the garden, my two pugs are sunning themselves in the beautiful afternoon sunshine. In just a short month we have had to adapt to a new way of life and working and I am totally embracing the paperless office concept, Zoom calls, and daily webinars. And we have all learned a new word “furloughed” which we use and hear on a daily basis.
Emergency legislation passed in the Houses of Parliament mean that landlords will not be able to start proceedings to evict tenants for at least a three-month period. The Government has made it clear no tenant should face eviction during this pandemic. On 27th March 2020, the court service suspended all ongoing housing possession actions. This means that all cases either currently in, or about to go into the system cannot progress to the stage where someone could be evicted. The suspension of housing possessions action will initially last for 90 days, but the UK Government can extend this period.
Notice periods extended
When using either Section 8 or Section 21 Notices, landlords must give at least three months’ notice before they can apply to the court for possession. This applies regardless of which ground is used for Section 8.
Right to rent checks
The government has announced some welcome news that the rules on right to rent checks for landlords have been temporarily changed because of COVID-19 and the difficulties of complying with the normal right to rent checks during the lockdown. With effect from the 30 March 2020 the temporary changes meant that a landlord or agent can carry out these checks via video call using scanned copies of documents provided. The rules say that the retrospective right to rent checks must be conducted within eight weeks of the temporary coronavirus right to rent check measures ending. In other Right to Rent news this week – A campaigning group has lost its latest legal battle to have the scheme scrapped on the grounds that it prompts landlords to discriminate against ethnic minorities. In the judgment Lord Justices Davis, Henderson and Hickinbottom agreed that the scheme was discriminatory, but stopped short of finding that it violates human rights law. They instead left it to MPs and the Government to decide whether racial discrimination is ‘greater than envisaged’, saying that only a small minority of landlords were being discriminatory.
Gas safety checks
The Gas Safe website advises that the law is flexible and where it is not possible to carry out a gas safety check due to COVID-19, it will normally be enough to show that you took reasonable steps to do so. In the event, it is not possible to gain access to the property, eg refusal of access due to tenants self-isolating, or if you are unable to engage a registered gas engineer to carry out the work due to a shortage of available engineers, you will be expected to demonstrate that you took reasonable steps to comply with the law. This should include records of communication with the tenant and details of your engineer’s attempts to gain access. You should seek to arrange the safety check as soon as all parties are available. Landlords should not suspend all gas safety checks at this time as it will unnecessarily put tenants at increased risk, particularly as people are spending most, and in some cases all, of their time at home. Each property should be considered on a case-by-case basis, completing safety checks where tenants permit access and gas engineers are available. If you are unable to secure the services of your usual engineers, you must make reasonable attempts to obtain alternative services.
Imminent legislation in the form of the Electrical Safety Standards in the Private Rented Sector (England) Regulations 2020 will apply in England to all new tenancies from 1 July 2020 and all existing tenancies from 1 April 2021. If you are renting out a property in England, any tenancy you create or renew on or after July 1st, 2020 will require an electrical inspection and a report on the condition of the property (EICR) performed by a qualified person. Renewals, in this case, include statutory periodic tenancies that are created at the end of a fixed-term on or after this date. For pre-existing tenancies, you will need to have an EICR performed on all existing tenancies before April 1st, 2021. This legislation has not been put on hold during the COVID-19 crisis, therefore, like with the gas certification, you must make every endeavour to fulfil your obligation and if it is not possible then you must make a record of this and arrange as soon as possible.
We have had very few repairs or problems reported (the exception being dishwashers it seems) and we will expect to see a rise in reported issues once the lockdown restrictions are lifted. The latest Government guidance does state that any work carried out in people’s homes, for example by tradespeople carrying out repairs and maintenance, can continue, provided that the tradesperson is well and has no symptoms. Public Health England guidelines, including maintaining a two-meter distance from any household occupants, must be followed to ensure everyone’s safety. No work should be carried out in any household which is isolating or where an individual is being shielded, unless it is to remedy a direct risk to the safety of the household, such as emergency plumbing or repairs, and where the tradesperson is willing to do so. No work should be carried out by a tradesperson who has Coronavirus symptoms, however mild. In such cases, Public Health England can provide advice to tradespeople and households. I have been working with our property inspection software company who has developed an App so that tenants can report repairs online and for tenants to carry out a self-assessed property inspection which will prove very helpful during this time. More of this to follow.
Properties on the market
We are still only able to deal with critical moves and I have been surprised at just how many applicants are looking to move. We are registering an applicant’s interests and sending property videos where we have them. Rightmove has reported that searches for properties with gardens have, unsurprisingly, doubled since the beginning of Lockdown. Remote working has proved highly successful in London and the South East and this may be the start of people rethinking their needs and location and are searching for some outdoor space and tranquillity.
I am pleased to say that the vast majority of rents are being paid on time, many thanks to the intervention of the Government, and we are working closely with tenants and landlords if there are financial difficulties. The government has started an inquiry which will examine how effective UK Government support has been in supporting individuals in the private rented sector or who are homeless. It will also look at what long term strategies will need to be put in place to support both groups in the long-term, once current measures expire.
I hope you are all safe and well and having a positive lockdown. Evidently, we are buying exercise equipment (mainly yoga mats), top half clothing (no need for bottom half clothing if you are on a video calls), olive oil and beard trimmers. Oh, and alcohol sales are up by 30%. Enjoy…
Sara Gray, MARLA