Property law: Rise in landlords’ instructions against defaulting tenants

Property law: Rise in landlords’ instructions against defaulting tenants

A rapidly growing number of tenants are struggling to pay rent and falling into arrears and, with the current economic climate, landlords are becoming less tolerant as can be seen by the increasing number of instructions against tenants in arrears.

Landlord Action, a company that specialises in helping landlords evict difficult tenants, have noted that the number of instructions against defaulting tenants has risen by 11% year on year.

Paul Shamplina, founder of Landlord Action, believes that, although owners with buy-to-let mortgages are yet to feel the effects of rental arrears, landlords are losing their patience with tenants.

He said: “Where landlords may have once been more lenient, they can no longer afford to be, especially with the knowledge that they could readily rent to someone else who can afford the payments.”

But for tenants the situation is looking grim as they are unable to afford to buy and rental properties are becoming more expensive and more in demand.

Mr Shamplina said: “Tenants are stuck in a catch twenty-two situation. Lending criteria requiring large deposits has locked many out of making a purchase and yet, high demand and low supply of rental properties is pushing rents to record highs. As a result 8,700 more tenants compared to this time last year are over two months in arrears according to Templeton, and this figure is rapidly climbing.”

Landlords, especially those renting to Local Housing Allowance tenants, are concerned that their tenants may not be able to pay their rent since the benefit caps came into force in April.

According to Landlord Action, landlords have been taking measures to protect themselves from defaulting on their own mortgage repayments by serving Section 21 notices of possession.

Mr Shamplina said: “As anticipated earlier in the year when caps to LHA benefits were announced, we have seen a sharp rise in the number of landlords serving Section 21 two-month notices on their LHA tenants and issuing accelerated possession proceedings.”

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