Tuesday, 13 August 2013

Councils are to Blame for Rising Rents

Landlords are increasingly come under attack for sky high rents – but if you want to find the real reason rents are rising, then look no further than your local council.
Councils are to blame for rising rents
Read any of the many landlord forums on the internet and you’ll come across the same scenario again and again: a landlord has issued eviction proceedings against a tenant, but the tenant is advised by the council not to budge until the bailiffs arrive.
Going through the proper eviction process can take months and cost the landlord thousands of pounds – more if the tenant has stopped paying the rent.
Yet local councils do nothing to help. In fact, they do just the opposite. And their stance doesn't just cost landlords money but other tenants too.

Council policy

Landlords might want to evict a tenant for any of a number of reasons. Perhaps the tenant has fallen behind on the rent, broken the terms of the tenancy agreement or damaged the property. In some cases the landlord might need the property back to live in themselves.
Tenants with nowhere to go might approach the local authority to house them, but local Government housing officers repeatedly come out with some controversial advice: they tell tenants not to leave their current accommodation until the bailiffs arrive.
This means ignoring either a section eight or section 21 notice to move out (either notice will give a tenant at least two months to leave) and then, subsequently, a possession order from a court. Once the possession order has passed, landlords can get a warrant for possession and send the bailiffs round to evict the tenant.
In general councils view any tenant who’s left their previous accommodation before the bailiffs arrive as “intentionally homeless” and so refuse to re-house them.
Dubbed “gatekeeping”, this policy effectively keeps official homeless numbers down, despite the fact that the policy causes havoc in the private rented sector.

Conflicting laws

Council housing officers are in effect encouraging tenants to break the law. A possession order is an order of court issued by a judge and tenants could be held in contempt of court for ignoring it. However I’ve yet to see a tenant prosecuted for this.
Landlords, on the other hand, can end up in court or be fined for any number of misdemeanours such as not having a gas safety certificate or protecting a tenant’s deposit.
Landlords can also end up in hot water if they 'harass' a tenant, even if the tenant has long stopped paying the rent.
It doesn’t seem fair, does it?

Effect on landlords

One of the most common reasons landlords evict tenants is for rent arrears. If a tenant stops paying rent landlords have to go through a time-consuming and expensive process to evict them. In many case tenants can remain in a property for six months or more without paying a penny.
While anti-landlord campaigners might think a cashflow problem is little more than landlords deserve, it pays to look at the bigger picture.
All the time a property is occupied by non-paying tenants, it’s not available to paying, law-abiding tenants. The problems of supply and demand in the private rented sector are well documented – there aren’t enough properties available to rent, so landlords can achieve high rents for properties they do have to let. Anything that decreases supply further simply adds to the supply and demand problem and pushes rents higher still.
Meanwhile, when the landlord eventually gets possession of their property they’ll be looking to re-let it as soon as possible so it can start generating income again. This means they won’t have a lot of time or cash to refurbish it or fix anything that’s broken which means the standard of accommodation falls.
Finally, in a bid to recoup their losses, the landlord is likely to up the rent for the next tenant.

Effect on tenants

Council advice can put tenants in a catch-22 situation. If they want or need council help to be re-housed they have to do as the housing officer suggests, but this means ignoring a possession order from a court. If the landlord decides to pursue them for unpaid rent or the costs of eviction the tenant could end up with a county court judgement (CCJ) in their name.
A CCJ has numerous effects on an individual. It will make it difficult to borrow money, rent another property, buy a property and, in some cases, get a job.
Meanwhile living in a property you’re being evicted from isn’t fun. Tenants may feel guilty about the way their landlord’s being treated, especially if the landlord-tenant relationship has been good up to that point.