07 Jun 2021
Many people will have heard on the radio over the Bank Holiday weekend reports about the eviction ban ending. A Joseph Rowntree Trust claim that 800,000 households face losing their homes was repeated throughout the day. Not once did Radio 4 or Times Radio mention rent arrears. Not once did they say that many landlords have received no rent for months and in some cases are themselves in financial difficulties because of that.
No landlords were interviewed. Nobody made the obvious point that, in the current climate, sensible landlords won’t evict without good reason and also that they still need to give four months’ notice under s21 so (law of unintended consequences at work) it is logical and prudent to s21 serve notices now just in case.
This morning (1st June 2021) Radio 4’s Today Programme. (I have listened again on the Sounds App to ensure I heard correctly) was enlightening. For a piece about landlords asking for six months’ rent in advance, they interviewed Dan Wilson Craw (DWC) of Generation Rent. The programme host, to be fair, did suggest there might be a backlash by landlords because of the eviction ban. Some landlords having had a bad experience of not being paid took rent upfront to provide some security. Too right.
DWC’s immediate response was to complain about landlords “wanting to avoid risk”. He criticised us for filtering out tenants on benefits and for “wanting to screen out those who [we] think may not be able to afford [the rent] in future”. Guilty as charged, m’lud. If a prospective tenant looks as if they can’t pay the rent, I don’t want him or her especially if I have to wait for months of arrears to accumulate.
DWC’s proposal was, and I quote: “The Government needs to give tenants more options and force landlords to take on ..er.. accept more risk”. Well, at least that is clear. Landlords, as distinct from other businesses, must be compelled to act imprudently. Having been stung already, we should take on more risk. There was no acknowledgement by DWC that landlords who are thousands of pounds out of pocket can’t be expected to act as if nothing had happened. We are just involuntary creditors to be treated as milch cows.
What happens when businesses are required to accept more risk? Well it often ends badly. Remember the sub-prime loan crisis made much worse when left-wing politicians pressured banks to lend to people with bad credit histories. Many people lost their homes and some were bankrupted.
I hope that politicians are listening. If they expect landlords to take more risk then rents will have to go up to compensate for increased defaults. More defaults and landlords will obtain more County Court judgments. More tenants will have credit scores ruined, making it harder than ever for them to buy a house.
If Generation Rent have their wish I predict rents will go up, more tenants will default. More CCJs, more misery all round. Not a great policy. A modicum of analysis would show it is unsustainable. Generation Rent don’t seem to realise that they will hurt the people they profess to support. If DWC or anyone else at GR would care to comment on this board, please do so.
Thanks for reading!
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