COVID-19 and the Growing Threat of Evictions in the UK

Mark Jordan

Lecturer of Land Law within Southampton Law School at the University of Southampton

Introduction

The COVID-19 pandemic has underlined the deep connections between housing and public health. Recognising how evictions present a public health risk, governments across the UK, have introduced emergency moratoriums on evictions. Yet as the countdown begins on these temporary measures, the social and economic impacts of the pandemic are already apparent in the looming rent arrears and evictions crisis. In the UK, there has been little recognition by policy makers of the pressing need for more extensive intervention to protect tenants during this next phase. This article outlines recent reforms in the UK that seek to protect private tenants from eviction in response to the COVID-19 pandemic. The article begins by outlining three points of context that are key to understanding the UK situation. First, the article will outline how deregulation in the 1980s installed an ultra-low residential security model. It will then be explained how the recent revival of private renting in the UK has exposed more households to insecurity and unaffordable rents. Finally, the article will explain how the revival of private renting has coincided with devolution, a major political development within the UK, that has significant housing implications. The article concludes by critically reflecting on recent reforms and suggests that more fundamental changes are necessary to close the gap between the promise of the human right to housing, and the lived reality for many in the UK.

Ultra-low Residential Security

The deregulation of private renting in the late 1980s transformed the respective legal positions of landlords and tenants in Britain. This was an expressly ideological project that sought, above all else, to promote a market in rented housing. Strong legal protections for tenants were presented as unnecessary encumbrances on the landlord’s property rights which unduly restricted the free movement of labour.[1] Thus, legal protections for tenants were swept away and replaced by an ultra-low residential security model that privileged the property rights of landlords and provided extremely limited legal protections for tenants. The centrepiece of this model is the assured shorthold tenancy (AST), which became the default private tenancy in Britain. The AST is characterised by extremely limited protections against eviction. Under an AST the grounds for ending the tenancy are unlimited. Thus, after an initial fixed term of 6 months, the landlord has the power to end the tenancy without having to give a reason – provided they give the tenant two months’ notice. Furthermore, deregulation greatly expanded the role of mandatory grounds for possession. These mandatory grounds compel the court to award possession (i.e. evict the tenant) once the landlord follows the appropriate procedure. Thus, the tenant has no possibility of raising anything other than a procedural defence. At the same time, deregulation swept away legal restrictions that rents had to be “fair” and instead entrenched the notion that rents should be at the “open market” rate. Instead of restricting rents, policy makers placed their faith in the ability of rent subsidies to “take the strain”.[2]

The Revival of Private Renting

Since the late 1990s, the private rented sector has more than doubled in size and now accommodates approximately one in five households across the UK.[3] There are various drivers behind the revival. These include, on the supply side, the introduction of Buy-To-Let mortgages in the 1990s which led to a flood of credit that expanded the stock of private rented housing. At the same time, on the demand side, the state promoted financialisation of owner occupation contributed to acute house price inflation that price many out of ownership. Faced with the persistent undersupply of social housing, many households were channelled towards private renting. As the sector increased in size, its nature changed. More families with children found a home there – by the late 2010s approximately one third of private rented households were families with children. Equally, while private renting accommodates households with a range of incomes, a significant proportion of low income households are private renters.[4] This reflects the increased state use of private rented housing to meet need for social housing and underlines the sector’s growing defacto social housing function.

As private renting has grown in size, more households have been exposed to the extremely limited legal protections against eviction and unaffordable rents. During the last decade, there has been acute rent inflation in many parts of the UK, contributing to considerable increase in state expenditure on rent subsidies. In parts of London, and the South of England, rent accounts for more than half of household income.[5] In the wake of the financial crisis, the UK government implemented an austerity and “welfare reform” project that restricted entitlement to rent subsidy. The resulting shortfall between rents and rent subsidy has meant that many households have been “priced out” of many areas. Tenants have also faced considerable insecurity. Indeed, a 2016 EU wide study of evictions and homelessness identified England as one of the eviction capitals of Europe and identified deregulation as playing a major role in facilitating this development. This is particularly concerning because the ending of a private tenancy in England “has become a major pathway into homelessness”.[6]

Devolution and Reform of Renting Law

The revival of private renting has coincided with a process of political devolution. In 1998, governmental institutions were established in Scotland and Wales and re-established in Northern Ireland. Although the Westminster Parliament remains the sovereign Parliament of the UK state, powers to make new housing law have been devolved to the Scottish Parliament, the Senedd/Welsh Parliament, and Northern Ireland Assembly. The devolved governments have embraced their powers to reform renting law in distinctive ways. Yet despite the distinctive approaches taken, one of the remarkable themes to emerge so far is how central tenants of the deregulation model have been carried forward into these reforms. In each case, the devolved governments have adopted the same goal of promoting a market in rented housing and have been concerned to develop reforms that do not intrude on the rates of return for private investment.[7] This theme of continuity is particularly apparent in Wales (2016) and Northern Ireland (2006) where reformers have tended to entrench in domestic law the central features of that model i.e. “no-fault” evictions, the central role for mandatory grounds for possession, and the market rent system.

In Scotland, a different approach has been taken and more extensive protections for tenants have been introduced (2019) but a similar theme can be discerned. The assured shorthold was abolished and replaced by the Private Residential Tenancy. This is characterised by open ended tenancies, notice periods that vary according to the duration of the tenancy and limited grounds for possession. Thus, so called, “no fault” evictions have been abolished in Scotland. However, there remains a central role for mandatory grounds for possession and indeed rent arrears was originally designated a (mainly) mandatory ground. Equally, while restrictions on rent increases have been extended, and additional restrictions introduced for, so called, Rent Pressure Zones, the market rent model has been entrenched in domestic law.

COVID-19 Reforms of Renting Law

The COVID-19 pandemic has led to significant reforms of renting law in the UK. Once again, it is necessary to take account of devolution which has facilitated distinctive responses to the pandemic. Taking evictions first, it is remarkable how, in England and Wales, the main protections for private tenants were introduced by the courts which issued a Practice Directive that placed a temporary moratorium on evictions until 25 June 2020 – since extended to 23 August 2020. Subsequently, the Westminster government introduced the Coronavirus Act 2020 which extended the notice period for landlords seeking possession in England and Wales, from two months to three months and extended entitlement to rent subsidy. In Northern Ireland, there has been a similar temporary moratorium on evictions and notice periods for private tenants have also been extended – landlords must give private tenants at least 12 weeks’ notice.

Once again, Scottish reforms have gone further in extending protections for tenants. The Coronavirus (Scotland) Act 2020 has temporarily extended various tenant protections for a six month period, due to expire on 30 September 2020 – although there is scope to extend this until 30 September 2021. During this window, notice periods have been temporarily extended and landlords must give tenants’ at least 6 months’ notice, save in exceptional situations involving criminal/antisocial behaviour – where a 3 month notice period applies. Arguably the most significant change has been to make all grounds for possession, including rent arrears, discretionary during this window. This requires the court to exercise a broad discretion to consider all of the circumstances of the eviction case including, for instance, the impact of COVID-19 on both landlord and tenant, when deciding whether or not to award possession.

Although the various governments of the UK have recognised the public health risk posed by evictions and extended legal protections of varying quality, they have not yet devised meaningful legal reforms to address the looming rent arrears crisis. Despite the introduction of income supports and furlough schemes, approximately a third of private renters are worried about being able to pay their rent when the lockdown ends.[8] Given the general precarity of many households in the private rented sector, it is serious concern that there have been no attempts by any government in the UK to extend rent regulation. Indeed, rather than consider displacing the market rent system, or even extending rent regulation, the  various governments have simply encouraged tenants, who are struggling to pay their rent, to engage with their landlords. The result of relying on the benevolence of individual landlords to address the systemic failure of the market rent system to produce affordable rents has been unsurprising: approximately half of tenants who asked for a rent holiday in recent weeks have been refused.[9]

Conclusion

The moratoriums on evictions introduced across the UK provide valuable, but only temporary, respite for tenants. Without additional intervention, the COVID-19 pandemic is likely to further exacerbate the insecurity and unaffordable housing costs that have long characterised private renting in the UK. Many policy makers have yet to reckon with the fact that a major contributing factor to this insecurity and unaffordability is the system of legal regulation of private renting. Deregulation in the 1980s installed an ultra-low residential security model that privileges the landlords property rights and provides extremely limited protections to tenants. Within this model there is little, if any, recognition of the residential occupier as a holder of human rights. This is despite the fact that the UK has accepted obligations in international law to protect the human right to housing and ensure tenants have adequate legal protections against eviction i.e. that eviction should be a last resort, subject to meaningful judicial supervision, and not lead to homelessness.[10]

It is important to recognise how political devolution has created the potential for the devolved governments to reform renting law and start to close the gap between the promise of the human right to housing and the lived reality for many. While there have been some meaningful advances in protecting tenants’ rights, most notably in Scotland, when taken together the national reforms tend to demonstrate just how deeply entrenched the ultra-low residential security model has become in the UK. This has been further demonstrated by the response to the COVID-19 pandemic. Once the eviction moratorium comes to an end in England, Wales and Northern Ireland, tenants remain subject to much the same extremely limited legal protections of the ultra-low residential security model. In contrast, by making all grounds for possession discretionary, the Scottish government have extended more effective legal protections against eviction. On the rent question, policy makers across the UK remain united in their reluctance to consider departing from the market rent model, despite the repeated failure of that model to produce widely affordable rents. In light of the looming rent arrears crisis, it remains to be seen how long this commitment can be maintained.