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It has been reported this week by the National Landlords Association that 70% of the Private Rental Sector is now made up of amateur landlords. They on average have 4 properties each and generate an average £31k in income.
I can well believe this. The amateur landlords as defined above are looking to build a portfolio. In my experience this is usually to try and gain financial security. This will enable them to be able to break away from their full time employment and have an easier life.But spare a thought for the other type of amateur landlord. the landlord by default.
I have noticed a huge increase in instructions for evictions over the last five years from the landlords that only have one property and have run in to financial problems, because of non-paying tenants. We are talking about landlords, that have moved out of the property and did not plan to rent it out but circumstances led them to find a tenant, so that they can pay the mortgage. In a lot of cases they do not have a buy to let mortgage and the lender has not been informed of the rental, which can be a breach of mortgage terms.
In a lot of scenarios where we have been instructed, we ask the landlord how they referenced the tenant. The all too common answer is that the referencing was not carried out property. Vital information like bank statements/ financials, employment or previous landlords references are missing. The landlords rush through the rental, because they fear void periods. This causes problems with a non-paying tenant further down the line.
We are instructed frequently, when a landlord wants to evict the tenant under Section 21. This is typically because the landlord wants to sell the property, historically the market has risen and they want to cash in their chips, or pay off debts. At the moment I would say we know of over ten cases, where the landlord is in arrears with his mortgage and the bank are carrying out mortgage repossession proceedings. It’s often a race against time for us to gain possession before they do, so the landlord can sell, rather than taking a massive hit with the bank selling at a significantly reduced rate.We also have cases, where the landlord will say, " I’ve had enough of being a landlord, it's too much grief, and I want to sell. " Because they have experienced the tenant from hell, been a victim of the housing benefit caps, or their LHA tenant has kept the rent and not passed it on. Often simply there has been too much regulation.
My advice for the landlords I’ve talked about in this blog. If you are a landlord, understand your responsibilities. Make sure you fully reference the tenant via a tenant reference company and do not rush your decision. Get rental insurance and instruct a managing agent to let and manage the property. This is vital because a lot of the time landlords do not simply have time to deal with issues during a let, which can cause arguments with the tenant.
Landlord action was set up by landlords for landlords with problem tenants. That is, tenants who are in rent arrears or break some other part of a tenancy agreement. Landlord & tenant law is a specialist area and we found solicitor charges were too much and too vague. When you have a bad tenant you want to evict them fast. Any landlord would want a bad tenant out. they want advice and help with the law. And that's what we do. We are experts in this area and unlike solicitors, we only act for landlords, never tenants. And we'll help recover the outstanding rent. Our free advice line is open to all landlords and we have carried out thousands of evictions.