In response to increasing tenant arrears, a leading property industry commentator has outlined a five-point guide for landlords grappling with this growing issue.
Among the recommendations is a call for landlords to engage directly with tenants to determine what they can reasonably afford to pay in rent.
Recent government data reveals that county court bailiffs evicted 2,682 households in England and Wales in the first quarter of this year, following landlords issuing Section 21 eviction notices. This marks the highest eviction level since early 2017, despite the government’s 2019 promise to abolish the practice.
Commenting on these figures, Jonathan Rolande, a spokesperson for the National Association of Property Buyers, noted, “The use of Section 21 … was up 19% in the first quarter of 2024. The involvement of bailiffs has reached a six-year peak.”
Rolande explained that many landlords and the court system are still addressing the backlog of cases from the Covid-19 pandemic, with historical debts now being settled. “Many landlords have issued Section 21 notices to sell, as it is now almost impossible to profit from a rental property with a high percentage mortgage,” he added.
The uncertainty surrounding the government’s delayed Section 21 ban has further exacerbated the situation, causing unrest among property owners. “The cost of living crisis has also played a role, with landlords facing higher costs for insurance and maintenance, while tenants struggle as wages lag behind inflation in the food and energy sectors,” Rolande pointed out.
He highlighted that Section 21 is typically not used to evict non-paying tenants, which is the purpose of Section 8. Instead, Section 21 is used to end a fixed term tenancy. The increased use of bailiffs in these cases suggests tenants are staying in properties as long as possible due to the scarcity and unaffordability of alternative accommodation.
Rolande’s advice to landlords includes:
- Forbearance: Start with patience, especially if the tenant has a history of reliability, as anyone’s circumstances can deteriorate.
- Open Communication: Ask tenants about their ability to pay.
- Support Existing Tenants: It is often better to assist a current tenant than to evict and find a new one.
- Consider Vulnerability: Assess if the tenant is in a vulnerable state and make necessary allowances.
- Benefit Assistance: Help tenants claim benefits if needed, using eviction as a last resort only after all other options have been exhausted.
Rolande emphasized that such challenging situations are another unfortunate aspect of the ongoing housing crisis affecting many across the country.