Covid-19 and Social Housing: the potential long term impacts
With the promise of spring just around the corner and as positivity slowly seeps into the nation, we need to turn our thoughts to what the new financial year will bring in the aftermath of Covid-19.
As many have reported, in January of this year, the Supreme Court decided that certain business interruption insurance policies would respond to losses arising from the Pandemic, which was great news for businesses which had purchased insurance with the relevant cover.
As several of my colleagues have already discussed in their related articles, the Property market faces several challenges such as the change to the availability of the Buy to Let product and the suspension of Possession Claims under the Coronavirus Act 2020. However, what now needs to be considered going forward is how to keep the building market on track and what pitfalls to look out for.
Whilst the Supreme Court’s decision was good news for many policyholders, even those with the right cover will need to establish that they have suffered a loss as defined in the Policy. What, then, of an affordable housing provider which has suspended its tenants rent, as many have? Under the Public Health (Coronavirus) (Protection from Eviction and Taking Control of Goods) (England) Regulations 2020, a landlord cannot evict tenants for non-payment of rent (unless they are in substantial arrears), but the Regulations do not require landlords to release tenants from their obligation to pay rent.
This presents a difficult question. On one view, the affordable housing provider has suffered a clear loss, being the shortfall in rent. On the other, it remains entitled to collect rent from its tenants and its insurers may say that its loss arises, not from the effects of the Pandemic on its ability to collect rent, but its voluntary waiver or suspension of rent.
It will be interesting to see how this issue develops, but on any view affordable housing providers are likely to be left with a deficit in their income stream. This could have an impact on their ability to purchase new sites or parts of sites and consequential effects for both developers and affordable housing providers alike in terms of securing funding and scheme viability.
Although things may be looking up, the challenges that face the Property market have only just begun.
If you require further advice regarding affordable housing or any other Real Estate matter, please contact Terri Warren in our Real Estate department on 01276 854 942 or at email@example.com.
This reflects the law and market position at the date of publication and is written as a general guide. It does not contain definitive legal advice, which should be sought in relation to a specific matter.
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We are solicitors in Camberley, Wokingham and London. In 2019, Herrington Carmichael won ‘Property Law Firm of the Year’ at the Thames Valley Business Magazines Property Awards, ‘Best Medium Sized Business’ at the Surrey Heath Business Awards and we were named IR Global’s ‘Member of the Year’. We are ranked as a Leading Firm 2020 by Legal 500 and Alistair McArthur is ranked in Chambers 2020.