Possession Increasingly Obtained Without Money Orders

Landlords have used S21 proceedings instead of S8 for years, knowig they are throwing good money after bad.

So much so, that it is common practice in homelessness units to presume intentional homelessness where there are rent arrears but the landlord has not claimed them, using S21 on the basis that if not for the arrears the landlrod would have continued the letting.

What is interesting about this article is that fact that it is being acknowledged that rent arrears are on the increase, at the same time as rent being at an all time high. Is this not telling landlords something?

Are these not signs that the market is at breaking point?

If the tenant simply cant afford to pay more rent where does that leave the landlord? especially when mortgage interest rates rise.

"What is interesting about this article is that fact that it is being acknowledged that rent arrears are on the increase, at the same time as rent being at an all time high. Is this not telling landlords something?"

It’s telling me, “to store up as match as possible in the good years, to cope with the bad years” as leaving grain in the fields does not stop the bad years coming. A single landlord does not reduce the likelihood of problems by charging below market rent, if anything I would expect more problems.

I also don’t expect any tenant to be willing to pay over the market rent, if the market drops, regardless of paying below the going rent at present.

However If I was a landlord in London, I would be thinking very carefully about selling up (Sorry not what a hosing officer wishes to here).

If only rents in the Midlands were going up as much as London! Cambridge seems to be going up slowly, but with good demand.

Ian I have tweeted someting out this afternoon. An article about how the Midlands is heading for a new housing crisis because of high rents and sale prices.

When I was in Brum the other week I drooled over the low level of rents in estate agents windows but forget that wages are lower so everything is relative really.

I have every sympathy with landlords, even consider myself the landlord's friend in most things but I will never agree on the morality of current rent levels, especially in London. they are blatant profiteering in my book I'm afraid. You may store up while things are good Ian but you are storing up at the expense of others having to turn to pay day loans just to help you store up for the winter

70% of possesion cases are being driven by rent arrears http://www.24dash.com/news/housing/2011-12-08-Over-70-of-tenants-evicted-over-rent-arrears-in-private-sector-research

It also doesnt make business sense to kill the goose that lays the golden egg.

The Bank of England have already warned of mortgage rate interest rises in the new year. If tenants are so maxed out on paying thier rents that arrears are increasing and people are turning to pay day loans just to stay in their homes, how are landlrods going to raise rent to meet interest rates when people already cant cope?

This week I have interviewed 2 landlords who are in mortgage arrears and threatened with repossession because their tenants are behind on the rent. The market can only bear so much and it is the tenant's who are supporting the market whilst slowly going into financial meltdown, while landlords store up for the winter.

Taking a holistic view, which I believe I am one of the few around who is, it doesnt make business sense to set rents so high that people cant afford them. there will be a backlash. I dont know if anyone is monitoring figures but I wonder, in this current climate of grim austerity, if rent arrears will rise over the Xmas period with people saying 'Sod it, enough is enough. My kids come first f***k the landlord's profits'. Which is what I am hearing in interview rooms lately.

I agree with Shelter on many of their campaigns apart from their rogue landlord one, which I think is over-simplistic and misplaced and I agree with landlords in much of what they are trying to achieve but not on the subject of rent levels. Not just on moral grounds but on business ones too. It makes no sense to set something up for a short term gain that could destroy you long term.

I stand back, naked in the light of these comments on P118 and await the kicking haha

"It also doesnt make business sense to kill the goose that lays the golden egg. "

The problem is that a single landlord can't stop other landlords killing the goose. Anyway I would not call about 4% yield after charges/voids etc. a "golden egg" - that is about what we get, but we are renting out nice homes we brought to live in - rather than low end BLT props.

BLT???? Bacon Lettuce and Tomato?

Sorry I meant BTL, now how do I edit a post?

Seriously though Ian. I dont expect a single landlord to stop other landlords killing the goose. It is simply a matter of not killing your own goose when things go belly up for your properties and tenants.

I know several landlords whose rents are kept well below current market level for exactly that reason, they realise that thier finances are inextricably entwined with those of their tenants, who are their source of income - taking the long term view with reliable tenants who can afford to live in the homes they provide. This landlords will survive.

Also I dont think for a minute that BTL properties are necessarily low end, nor that landlords rent out homes they originally bought to live in. I appreciate that this may be how you got into the business but it isnt across the board.

I regularly read on this site of landlords saying how hard it is to find good tenants and persuade them to stay on long term, if that is the case then surely it makes sense to help keep them there.

I would love to carry on living in my place at the end of my agreement in March but I am sure my landlord will simply jack the rent up another £200 a month (which happened to the flat above mine 2 months ago) and me and Frazzy will be forced into a 3rd expensive move in 18 months. If even 2 decent wage earning middle aged professionals cant afford to even pay rent where does that leave so many others?

Sorry Ian, you can't, but it was quite funny from this side of the screen 😉 Coffee spray now removed from mine thanks to Mary's cleaning tips

Hi Ben

I do feel for everybody in the same position as you and Frazzy but the issue goes back to the most basic laws of economics "scarcity" better known as supply and demand. Economics is a social science at best, it's very much like nature, it sorts itself out in the end. I remember when I was a kid and one summer there was a plague of ladybirds, walls were covered in them an inch thick, but the balance was soon restored. It's anybody's guess as to what will happen to the London property market for it to level out but right now it's foreign buyers that are inflating the market and creating the scarcity issues, not buy to let landlords. Across the UK there is a lot less new BTL business occuring than there was 3 or 4 years ago, about 75% less in fact. There is also a lot less property being built. Are those two things coincidental? Only when supply of property is increased beyond the point of demand will rents fall. What are the short term prospects of that though? none I'd suggest.

The trouble is, there are not enough properties being built because so few would be homeowners and BTL investors can raise the finance to buy them at a price that justifies them being built. That seems like a stalemate but I suspect it isn't. With the advancements of technology combined with the issues surrounding affordability it may well be that the London property market finds its level as a result of more people moving further out of the city, thus causing the ripple effects across the UK which you so often see me write about.

I dont disagree with your analysis Mark but one thing that I think should be significantly different with market forces determining rent is that people's homes arent turnips, or maybe, less facetiously, not charter flights.

If cheap flight prices rise as a result of market forces pushing up airport costs and fuel, people just cut back on holidays. Annoying but no more than that, whereas if market forces push rents beyond the levels people can afford people end up homeless or being driven from the areas where they grew up and where their family, freinds and work is and I dont think that is acceptable.

Communities thrive by being just that, communities. but if people are forced to move because of high rents, and the insecurity of assured shorthold tenancies communites get destroyed and nobody cares about anyone else, thats how riots happen, through people not caring about the area they live in because they have no vested interests in it.

I totally agree about foreign investors affecting the market. My landlords are a couple of non resident Greek brothers, thats why I know they will jack the rent up, based on the info on rent levels that their London based national agents will tell them is achievable and on a daily basis I am seeing a massive rise in clients coming in to see me whose landlrods are Chinese, whereas from 1990 to 2001 I think I only ever saw 1 Chinese landlord.

I read last week of some mortgage companies coming up with deals to make it easier for first time buyers to get in which, the article warned, if succesful could take the presure off the PRS and drive rents down. Obviously as a tenant I would wlecome that but as a housing profesional it is not lost on me what will happen to PRS landlords who have to lower rents if, as Ian suggests about they are only making 4% on top of everything else. We cant afford for PRS landlords to drop in number.

The whole system seems cockeyed to me, just permanently in boom and bust, either tenants suffer because rents are ridiculous or landlords suffer when the market forces their margins down. There has to be a more sustainable way of working than this