Building with To Let sign Building with To Let sign
Building with To Let sign

Government Extends Eviction Ban for Commercial Tenants but Not Residential

Rent Guarantor Jun 30, 2021

As signs emerged in February and March 2020 that the coronavirus pandemic was going to cause much financial hardship, the government put a number of rules in place to protect the population

, including banning evictions across the residential and commercial lettings industries. After two last minute extensions, on May 31st 2021, residential tenants lost that protection and landlords were permitted to give four weeks’ notice before beginning eviction proceedings. However, the commercial sector has seen eviction bans extended until March 2022, with further supportive legislation on the way.

While it’s clear that the commercial and residential rental sectors do have differences, there are also similarities, including in the way the pandemic has affected tenants’ ability to pay their rent and landlords' finances too. Indeed, while there will be some cases where residential landlords should have been permitted to give just four weeks’ notice during the pandemic due to the behaviour of their tenants, that’s not true across the board, not even close.

By providing continued protection to commercial tenants with one hand while removing it from residential tenants with the other, some would say it suggests the government has more sympathy for and interest in the commercial rental industry than the residential sector. According to Generation Rent's Director Baroness Alicia Kennedy, this is yet another decision that is hurting residential renters at what is still a difficult time for many.

Commercial Tenants Given Further Support

In mid-June and following the Prime Minister’s decision to delay the next step of lockdown easing, Stephen Barclay, chief secretary to the UK Treasury told the House of Commons that the rule protecting commercial business tenants from being evicted due to problems paying rent would be extended until March 2022, rather than expiring at the end of June 2021 as previously planned.

Barclay told MP’s the decision “strikes the right balance between protecting landlords and supporting those businesses that are most in need”. He added that new legislation would be introduced during this parliament to put further support in place so that where negotiations between commercial tenants and their landlords failed, they must go into arbitration, the results of which will be binding.

While this additional period of support for commercial tenants will likely be welcomed by the industry, it has left residential tenants and landlords and the bodies representing them wondering why they too aren’t receiving similar continued help from the government.

Government Must do More for Residential Lettings Industry

For residential renters, government rules banning evictions lapsed on May 31, 2021, in line with the last extension of the support. However, just as many commercial tenants are still feeling the effects of the coronavirus pandemic, with earnings still below previous levels as business continues to be hurt by restrictions, residential tenants are now subject to four-week notice periods of eviction. Meanwhile, landlords are also unhappy as they have little to no options with regards to unpaid or underpaid rent during the pandemic.

In addition to the comments made by Generation Rent Director Baroness Kennedy that the government has taken a number of decisions that collectively hurt private sector tenants, she adds that the government should now step in with a Covid Rent Arrears Fund to clear unpaid rents; she’s not alone in her call for such a move.

Property industry body Propertymark has joined with others in writing Eddie Hughes, MP for rough sleeping and housing, requesting emergency government support for Covid-19 related rent arrears.

“With the furlough scheme ending in September, the UK Government must build a bridge to recovery and provide a dedicated financial support package for the sector,” said Propertymark’s Policy and Campaigns Manager, Timothy Douglas. “While measures through the welfare system have been welcome, more needs to be done to alleviate COVID-related arrears and remove the risk of eviction.”

Whether or not the government listens to the growing clamour of voices calling for more specific financial support for the coronavirus related rent arrears problem, remains to be seen. However, with the government stepping in to provide more support for other sectors, its difficult to see how they can go on ignoring the continued plight of the lettings industry with both tenants and landlords suffering through no fault of their own.

Building with To Let sign Building with To Let sign
Building with To Let sign