Landlords are now bribing tenants to quit properties, claims report

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Landlords faced with lengthy court waits have resorted to bribing tenants to get them out of their properties, it has been reported.

Many are so desperate that they are willing to cut their losses and write off arrears to gain vacant possession and avoid a long and expensive court process, reports The Telegraph.

A recent report by the University of York found landlords who were worried that increasingly restrictive regulations would hamper eviction had paid problematic tenants to leave.

Exhaustion

Author Dr Julie Rugg said the practice most often applied in cases of anti-social tenants or where huge arrears had accumulated. “A landlord won’t ask a good tenant to leave, so payments like this can represent exhaustion on the landlord’s part,” said Rugg.

One anonymous landlord who has about 200 tenants told the newspaper: “I have two tenants that I have offered to pay to leave. One was £20,000 in arrears, the other was £12,000 in arrears, and I offered to find them each a place to live and pay the first month’s rent and the deposit. I was going to write off their arrears.”

He expected to pay £2,000 to £2,500 on each case to cover the costs, but both offers were rejected because they wanted to be rehoused by the council and were told to wait for the bailiffs.

“If a tenant is in receipt of benefits, offering an incentive to leave is a problem because the council then deems them intentionally homeless,” the landlord added.

Paul Shamplina, founder of Landlord Action, said: “If a landlord is faced with choosing an eviction process, which could take up to 14 months, or writing off existing arrears but re-letting the property much sooner, the landlord has to weigh up which makes most financial sense and is the least stressful.”

Read more about evictions.

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How will EPC legislation impact your lettings business?

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Post-COVID, the landscape for landlords and lettings business owners faces further regulation.

The latest potential squeeze on landlords revolves around the Minimum Energy Efficiency Standards, which could take effect in 2025; these changes will impact the domestic rental property in England and Wales.

In practice, this will likely lead to tougher rules regarding your Energy Performance Certificates for each of your properties and the measurement of how efficient your properties are.

New legislation proposes that if you wish to advertise your property for rental from 2025 and onwards, you’ll be required to give lettings agents an updated and compliant EPC of a minimum of a C (currently an E).

This can potentially cost landlords thousands.

Landlords will be expected to pay for either insulating their properties to retain heat or use other ‘fabric first’ features that can help to improve heating and lighting.

What’s the trigger for the added requirement? Well the government is focused on the ‘green recovery’.

The current government mandate is to ensure that homes are energy-efficient and reduce

carbon waste, helping towards the government’s net-zero target.

We listen to dozens of Landlords a week at our parent company allervices4u.co.uk and one of the big ‘pain questions’ that we receive is, ‘how many more changes are there going to be, which will cut into my margins’?

It’s a tough question to answer, however, we can only answer by saying ‘we cant be 100% sure but likely yes’.

There is one thing that we are 100% sure of, however, and it is the fact that landlords must find solutions that protect themselves against the inevitable changes and do it in the most cost effective manner possible.

Our clients a kept on asking us for help, so we created the Total Asset Protection Plan

(landlord-protection.co.uk)

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‘Landlords have bills to pay too’, leading figure reminds Ministers as evictions loom

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A leading PRS figure has warned that the easing of Covid restrictions on July 19^th and the government’s plans to wind-down Covid support for the economy will have a significant effect on the private rented sector.

Tim Clark (pictured), chairman of the UK Association of Letting Agents (UKALA), says his members are worried about a surge in evictions and a contraction in the size of the rental market as the support for – and protection of – tenants ends following months of Covid.

“The restrictions on evictions during the last year, while appropriate for the time, could result in an explosive situation without the government providing more support to tenants,” he says.

“Landlord mortgage payments still need to be made and rent arrears will still exist.

“Without more support to tenants, as has been done elsewhere, there will be wide-spread evictions, leaving many tenants in impossible positions.

Kicked the can

“The government has effectively kicked the can down the road on this one. Currently, potential evictions are merely being postponed, but tangible help for tenants could help avoid them and the distress they bring.”

Clark also says this uncertainty within the private rental sector is driving more landlord to change their strategies, with over 50% of his members’ client landlords putting off plans to buy more properties and 40% planning to reduce their portfolio’s size.

“This situation, suggesting a possible reduction in the size of the PRS, adds a further potential squeeze on top of the evictions boiling pot,” adds Clark.

“Unfortunately the government has yet to recognise that, without help, tenants may not be able to rent again.”

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Lancashire town to extend selective licensing and raise fees for landlords

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The town of Burnley is set to ask residents and landlords whether it should extend its selective licensing schemes for another five years.

Its schemes in Burnley Wood and Healey Wood, along with the Leyland Road area of the town, are due to end in November but Burnley Council reports that both areas have seen improvements in the last five years.

Housing disrepair complaints have fallen, as well as the number of empty houses, while there’s also been a reduction in ASB and environmental crime and a rise in average house prices.

Fees are set to go up under the new scheme: from £715 for a new application and £640 for each additional property to £750 per new application and £670 for each additional property, with a 30% discount for anyone in the council’s good landlord and agent scheme.

Secretary of State

If it gets the go-ahead, an 11-week public consultation would start on 9th August, although the size of the schemes mean they would need Secretary of State sign off.

The council has been operating selective licensing since October 2008 and says that between 2013 and 2021, 25 landlords representing 41 properties were prosecuted for failing to apply for a licence while it served 20 financial civil penalties totalling £161,500.

In the Burnley Wood/Healey Wood and Leyland Road selective licensing areas, six financial civil penalties totalling £33,000 have been served.

Councillor John Harbour (pictured), executive member for housing, says tenants, landlords and the wider communities have all benefited from the initiative.

He adds: “It’s now time to consider whether selective licensing should continue in these areas and we want to hear from all those affected so we can make an informed decision.”

Read more about Burnley.

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