Landlords face higher court costs as possession claim fees increase

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Landlords face higher court costs as possession claim fees increase

The government has announced that court fees for landlords will rise this week.

However, fees for tenants to challenge a rent increase will remain frozen at £47.

The news comes as the government claims the justice system “is well prepared” to handle the Renters’ Rights Act.

Rise due to inflation

Annual price rises linked to inflation mean that, from this week, charges for possession claims will increase from £404 to £415, while bailiff fees will rise from £148 to £152.

The government says the increases to court and tribunal fees are part of annual price rises linked to inflation.

The National Residential Landlords Association (NRLA) writes on its website that the government claims the money raised from the increases will “be used to fund the improvements to the justice system pledged by the Government as part of the Renters’ Rights Act, which has promised end-to-end digitisation of the courts by spring next year”.

It adds: “In all, 80 fees across the Residential Property Division of the Property Chamber of the First-tier Tribunal will increase, including those for leasehold cases and most residential property cases.”

Deep concerns about readiness of court system

The news comes as industry experts warn the Renters’ Rights Act could overwhelm the court system.

As previously reported by Property118,  Propertymark warn the court system is not ready to handle the surge in claims as landlords are already waiting months to regain possession.

Megan Eighteen, President of ARLA Propertymark (Association of Residential Letting Agents), told Property118: “We recognise ambition behind the Renters’ Rights Act, but there remain deep concerns about the readiness of the court system to cope with the anticipated rise in possession and eviction cases.

“Removing “no-fault” evictions under Section 21 will shift many cases into contested hearings under Section 8, placing an increased burden on a system already stretched beyond capacity. Recent data shows that, in many parts of England, the time between claim and hearing now routinely stretches to 29 weeks, and in London that wait can extend to as long as 40 weeks.”

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Greens welcome claim that rent controls could save tenants £2,400 a year

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Greens welcome claim that rent controls could save tenants £2,400 a year

Rent controls could save the average private tenant in England £2,400 a year, according to a report welcomed by Green Party leader Zack Polanski.

The report, published by the UCL Institute for Innovation and Public Purpose, argues that controlling rents could reduce housing benefit spending while improving affordability for lower-income households.

It was written by Dr Beth Stratford, an honorary research fellow at the institute, and Dr Joe Beswick of the Rosa Luxemburg Foundation.

Researchers calculated that, had rents been frozen in November 2022, the government could have restored housing support to cover the cheapest 30% of local rents and still be spending £2 billion less each year on housing benefit.

Combining the freeze with increased housing support would now be saving the average renting household £2,400 annually, the report claims.

Also, disposable income among renters in the poorest fifth of households would be 22% higher.

Bring in rent controls

Mr Polanski welcomed the findings, saying on social media: “Great to see how well the new report into rent controls has landed!

“It saves renters money and it saves government money.

“And some of that money should be used on building new social housing stock, too!

“Win/win all around!”

He has previously promoted the report by saying it was time to “take back control of rents”.

Help cost-of-living

The Green Party has already called for rent controls as part of its response to the cost-of-living crisis.

During its 2026 local election campaign, it said councils should be given powers to restrict rent increases.

The Wales Green Party proposed a one-year freeze as a longer-term system was developed.

The new analysis also challenges claims that substantial rent reductions would make large numbers of landlords financially unviable.

Landlord profits cut

Using HM Revenue & Customs data, the researchers estimated that a 20% reduction would cut the mean pre-tax profit margin among mortgaged landlords from 70% to 64%.

That margin, they said, would still be 4.5 times the average pre-tax margin recorded by businesses across the economy.

However, the calculation excludes capital gains arising from house price growth.

Unmortgaged landlords, who account for 58% of unincorporated landlords in the report’s analysis, would retain higher margins.

A 10% rent reduction would make an estimated 2.3% of landlords unprofitable.

Controls will lead to sell off

The authors accept that controls would prompt some landlords to sell, including to councils and housing associations.

Savings generated by a 20% reduction could, within 10 years, support the purchase of at least 48% of the properties made unprofitable by the policy, the report estimates.

Half of those acquired homes could then be converted to social rent.

The proportion that could be purchased would rise to at least 56% with changes to council financing, according to the calculations.

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