Landlord Action’s Paul Shamplina (main image) has predicted a rise in landlords using rent guarantee insurance as well as tougher referencing to protect themselves against the fall-out of eviction reforms.
A perfect storm of tighter grounds for possession and the end of Section 21, along with a lack of investment in the courts and a chronic shortage of bailiffs – as well as higher landlord costs and higher rents creating a greater risk of arrears – means landlords will want to be more stringent with referencing, he tells LandlordZONE.
Once the Renters’ Rights Bill is passed, landlords must instead use a Section 8 and the government’s new Guide to the Renters’ Rights Bill helpfully explains how the legislation will ensure landlords “enjoy robust grounds for possession”.
It will provide protections for tenants who temporarily fall into rent arrears, “supporting both parties by preventing tenancies which are otherwise viable from ending”. This means an increase in the mandatory threshold for eviction from two to three months’ arrears and an increase in the notice period from two weeks to four.
“This will allow tenants more time to repay arrears and remain in their homes, while ensuring landlords do not face unsustainable costs. Landlords can also continue to use the discretionary rent arrears grounds, for example if rent is repeatedly late,” says the guide.
Worry
Shamplina believes that for landlords, it means starting the process – if they have to go to court – with an extra months’ rent arrears added. “The worry for landlords unfortunately is court delays, getting court orders and having them enforced,” he says. “The process is taking longer which adds to the landlord’s costs.”
Landlord Action is getting more instructions from landlords to enforce money orders against tenants which can be very challenging to collect as many tenants have to be tracked down and don’t have much money.
“Post-Covid, rent arrears are getting bigger and landlords feel that some tenants try and get away with it so will pay to try and get it enforced – and this will show up as a county court order,” he adds.
Original Post from landlordzone.co.uk
