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What Does The Future Hold For The PRS and Landlords

Julie Ford, a PRS specialist who runs the Hemel and St Albans Property Network comments on key issues impacting landlords and agents

When UK economic activity fell sharply over 100 days ago many residential landlords would have had concerns that their tenants would be unable to pay rent, and questioning how they could pay their mortgage. For many first-time landlords, they were suddenly experiencing unforeseen problems that even the best laid contingency plans could not have predicted. Reductions in wages, benefit claims and a suspension of all evictions, so for some it was not a good time to be a landlord.

For many, this has been a challenging time but thankfully manageable, with many tenants communicating well and a reported 84% of rents being paid in full.

In contrast, over 950,000 people forced to apply for Universal Credit as business had no choice but to close their doors, and landlords were embarking on the unknown territory of Universal Credit and the already poor administration system that the DWP provides.

The suspension of evictions has brought additional problems for those landlords who prior to 26th March may have been in the process of evicting a problem tenant for anti-social behaviour or rent arrears that were due prior to lockdown.

Many landlords are not aware that a S21 notice is only valid for six months from the date it is served, and as the Government have not clearly explained that the moratorium of evictions is actually only a stoppage to courts working, many landlords believe they cannot submit possession applications to court. This then unknowingly allows a S21 to run out, meaning those landlords will have to serve a new S21 with the extended three months notice period, further prolonging the time a tenants remains in the property before eviction can take place.

But with just over 62,000 possession cases currently sat in the court administration process waiting for the doors to open again on 24th August, the real impact for landlords will be the backlog of cases needing to be heard. This could mean that many landlords won’t see their tenant evicted until well into 2021, all the while leaving landlords on average with an estimated £8,549 in arrears. This then puts pressure on mortgage companies who will inevitably withdraw products from the market for damage limitation, meaning buying a property could now be harder than ever before.

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