As of Monday, the eviction ban in England and Wales has ended, leaving up to 55,000 households vulnerable, according to campaigners.
Although there has been mounting pressure from councils and charities alike, the legal eviction process can now be progressed fully through the courts. The government’s reasoning for this is that they already extended the ban from its August deadline whilst extending eviction notices from three to six months.
Generation Rent’s Deputy Director, Dan Wilson Craw, who is leading the charge for a second extension, wrote “Without urgent action now, the government’s negligence will create a homelessness crisis entirely of its own making”.
Wilson Craw’s sentiments have been backed by Polly Neate, who is Chief Executive of Shelter. She warned, “We will undoubtedly see an increase in homelessness from today.” in regards to the government’s headstrong stance.
She also stated that these issues will be “long-lasting” and that “more than 300,000 people had fallen into arrears since the crisis started.”
But what does this mean for lenders?
Well, yesterday the government released their new official guide for landlords and tenants in England.
A Ministry of Housing, Communities and Local Government representative stated: “We’ve taken unprecedented action to support renters by banning evictions for six months, preventing people getting into financial hardship and helping businesses to pay salaries.
“To help keep people in their homes over the winter months, we’ve changed the law to increase notice periods to six months and introduced a ‘winter truce’ on the enforcement of evictions for the first time.
“In addition we have put in place a welfare safety net of nearly £9.3bn [$12bn] and increased Local Housing Allowance rates to cover the lowest 30% of market rents.”
This is positive news for lenders, as despite the ban on legal eviction now being lifted, there is minimal risk to the majority of those who could be affected by an eviction notice, with a six-month period to get their finances in order as well as a large welfare pool to pull from to repay loans, mortgages and rent arrears if needed.