Eviction Ban Has Increased Risk

September Lettings Market In Wandsworth has started strongly!!

With applicant registrations, viewings and offers up compared to August things have picked up in September!! This shows that there is still a good opportunity for Landlords to secure a tenant, providing the rental price of their property is competitively priced. However, this window of opportunity continues to narrow as we head into the fourth quarter, which is traditionally quieter for the lettings market. This is undoubtedly a tough market for Landlords and rents are still under a lot of pressure fuelled by a second coronavirus wave.

Where are we now in the Wandsworth Lettings Market?

Good news really and I say this as a Landlord not just as a Letting Agent whilst rents have come down in the area overall this will encourage people to live and work here. Tenants will identify that they are getting more for their money added by the fact that they are in a great location. And when life starts to open up there will be more tenant demand and rents will recover. We really do need to see people getting back to work in the office - most firms are trickling back from Sept 1 - the city will soon be back on its feet. And we really do need the city to get back on its feet!!

Tourism and Airbnb will be in trouble for as long as those in power keep the quarantine rules in place the simple truth is that the virus is still a threat. And widespread flouting of social distancing rules doesn't help. What needs to happen now is the way we assess risk not only in Wandsworth Lettings Market, but in many other locations across the country. As Landlords and letting agents the risk in finding a tenant(s) that dont pay their rent has increased. Due to coronavirus and Buy-to-let landlords must now provide tenants with at least six months’ notice period prior to seeking possession through the courts in most cases, including  section 21 evictions and rent arrears up to six months. Legislation relating to the new temporary notice period in England was introduced on Saturday 29 August, and will remain in place until at least 31 March 2021, except in the most serious of cases, such as incidents of anti-social behaviour and domestic abuse perpetrators.

The package of support for renters includes the extension of notice periods and the extension to the stay on possession proceedings. But there will be help for landlords affected by the worst cases to seek possession; these are:

• anti-social behaviour (now 4 weeks’ notice)
• domestic abuse (now 2 to 4 weeks’ notice)
• false statement (now 2 to 4 weeks’ notice)
• over 6 months’ accumulated rent arrears (now 4 weeks’ notice)
• breach of immigration rules ‘Right to Rent’ (now 3 months’ notice)

In addition, new court rules have been agreed, which will come into force on 20 September meaning landlords will need to set out in their claim any relevant information about a tenant’s circumstances, including information on the effect of the COVID-19 pandemic. Where this information is not provided, judges will have the ability to adjourn proceedings.

I'm afraid like any business, events can conspire against any normality and we aren't living in normal times at the moment. There is now a new business paradigm as far as residential letting property is concerned. Landlords who now do not factor these circumstances into their risk calculation are in serious danger of their Buy To Let assets taking a big hit.

New Court Rules & 6 Months Rent Arrears Will Impact Evictions Once Courts Re-Open

The eviction ban has really put the cat among the pigeons when you consider that the courts will have a backlog of evictions when they re-open on 20th September. This will only add to the timeframe and it could be another 6 months before you get a court hearing to start proceedings to evict a tenant. That doesn't leave a very good palatable taste to the mouth for any Landlord concerned. Which is why you need to factor this risk alone and take out additional cover it's a sensible way towards safeguarding your interests.

Keep your house in order!!

The most prudent way to keep your house in order against this law - which would seriously lead to rent arrears mounting up - without you being able to do anything about it, would be to take out additional rent insurance cover. Which covers your rent should your tenants become unemployed and/or get into financial difficulty. Yes it would cost more, for you to take on this additional expense, but so would a tenant not paying you rent for 6 months plus.

As I wrote in my blog last month,  Wandsworth Rental Market Trends the macro impact of increased unemployment rates is the biggest concern especially when the furlough scheme - which has been the lifeline to many employers and employees comes to an end by Oct 31.

Plus, the fact that there are other adjustments to the repossession process coming soon which will make the situation even more difficult. I will be writing about this in the months to come, but it certainly will make a difference as Landlords are in a precarious place at the moment.

For any Landlord looking to guarantee their rental payments now is the time and we can help as we work with the best companies that provide Rent Guarantee Insurance. To find out more complete the form for a FREE valuation and we will be in touch.

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