The Outlook for 2015

The Outlook for 2015.

Wow, 2014 has flown by. We have never been busier at Landlord Action and have expanded our legal department, taking on more solicitors and paralegals to service the rising number of instructions from landlords and letting agents.

Last year we have seen the most instructions through the Section 21 accelerated process. This is partly due to the fact that more tenants want to be re-housed by councils and so remain in properties to force landlords to evict them. However, there has also been a rise in the number of landlords wanting to sell their properties to cash in on the rising market. In 2013, there were over 32,000 accelerated claims; I believe in 2014 this figure will be nearer to 40,000.

So looking at my predictions for 2015, I believe the buy-to-let market will continue to grow. With over four million households in the private rented sector (PRS), it is rapidly overtaking the social housing sector. The growing numbers of young people relying on the PRS for homes means the government and local authorities need to work together to loosen planning restrictions on rented property and maximise the supply of good private rented homes available, especially in larger cities.

The Housing Minster, Brandon Lewis, says that the PRS has been neglected for too long by previous governments. I do think that the existing coalition government has been more proactive in the PRS. Recognising its importance to the overall housing sector, especially in the midst of a social housing crisis.  They want to encourage landlords to give tenants longer tenancies (which is all about building better relationships) and also support tenants to have a greater understanding of the rental system and avoid shrouding the system in even more red tape. Most landlords feel there is quite enough already. The government understand that the majority of landlords are smaller landlords owning between 1-3 properties and any more legislation could mean they exit the market.

The result of the 2015 election will be key to the future of the PRS. If Labour is returned to power there could be several policies introduced which would have a major impact on the rental sector. A few examples include possible rent controls returning us to a system we had in the 1970s, and a ban on letting agent administration fees. This loss of income would simply end up being passed on to landlords, and subsequently tenants, in another way.

The proposed introduction of an annual Mansion Tax for owners of £2 million plus properties would disproportionately penalise homeowners in London and the South East and I believe this could force a lot of London landlords (whose properties would easily fall into this bracket) to sell up or increase rents.  Labour also said they plan to build 200,000 homes a year by 2020, with half built being reserved for local first time buyers.It will be interesting to see if there is any provision for the PRS.

We will also need to see how the Retaliation Eviction Bill, put forward by Sarah Teather, maps out. “Retaliation” (or revenge eviction) is used to describe landlords who serve Section 21 notices to evict tenants who complain about disrepair issues, instead of carrying out these repairs. If this Bill is approved, a landlord will be unable to serve a Section 21 on his/her tenant within six months from the date the council files an improvement notice.

My biggest fear for 2015 is for social housing tenants and the implications of Universal Credit. Amid fears of increasing rent defaults as a result of Universal Credit being paid monthly as opposed to weekly, and directly to tenants, buy-to-let landlords  could turn potential tenants away, or even evict them, if they are on housing benefit. We speak to landlords that are exiting the housing benefit market on a daily basis. The pilot scheme has cost over £800 million so far and people I speak to in council departments are worried about it. Universal Credit was  introduced to encourage more people to get back to work, but could have a negative impact on landlords.

Despite this, I do believe 2015 will be a good year for landlords, achieving good yields with less void periods because demand remains so high.

Precise Treatment Reduces Pain

Detail needs experts. Expert time is worth it when it saves you a costly mistake. Main objective: Get the property back. Best action: Very precise treatment.

Serving a notice is actually the most important part of the possession process.

It isn’t complicated but one tiny error can cause dreadful problems.

That’s why we say, don’t DIY and don’t use internet amateurs. It’s not worth it.

1. Compliance Errors
If the tenant doesn’t leave at Step1, the notice had better be valid. Because then it has to go to court. Any little error can get a case thrown out. And you have to start all over again.

2. Attempting Short-Cuts.
In an effort to be quick, some internet services aimed at landlords are using short-cuts around the process. But if the tenant doesn’t leave (50%) these practices can backfire at court and the case thrown out.

3. Trying to Save Pennies.
Internet services have mushroomed and landlords can expect to get what they pay for. To get the process done PROPERLY it takes a certain amount of time for an expert to look over a file and be accurate. Our fees cover that expert time.

Chasing courts for dates, arranging advocates and preparing court papers is time consuming. Especially if you’ve never done it before.

Some landlord and agents have served notices themselves. They believed they were saving a few pounds but it often ended up costing them more.

If you lose a claim, the court can order you to pay the tenant’s defence cost, which can run to hundreds or thousands of pounds.

Our in-house Solicitors are there to get your property back as fast as they can. And we protect landlords and agents from themselves.

As experts, we know that in the rush to get things done, errors can happen. And those errors can can come back later to mess up your case – and the whole process has to start again.

You can speed things up – give us accurate information quickly. Help us to help you.

There are services on the web who will prepare papers BUT they get you to pay the court-fee separately and get you to sign the court papers – so in fact they don’t represent you!

If your notice (at Step1) wasn’t drafted or served correctly you risk wasting your court fees and losing a whole lot of time because of a small error.

We won’t let your case anywhere near a court until we have checked every little detail. To make sure you don’t waste time or money, at Step-2 we first only charge part of the fee.

If your notice is fine, then you just pay the balance of the fee and we issue the claim. If there is a problem with your notice or paperwork, we will advise you what to do next.

Courts take the view that possession proceedings can make someone homeless. So they are very careful. If there’s any error in the notice, they throw the case out. It’s the process. Get it right or lose.

If the notice is invalid, you have to start all over again. The weeks or months you’ve waited are wasted. If there were rent arrears, there are now more.

If there weren’t rent arrears, they might now start. More fees. More lost rent. And still no possession. Tenants can be alerted to making a counter-claim.

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