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Councils are to blame for rising rents

Landlords are increasingly come under attack for sky high rents – but if you want to find the real reason rents are rising, then look no further than your local council.

Read any of the many landlord forums on the internet and you’ll come across the same scenario again and again: a landlord has issued eviction proceedings against a tenant, but the tenant is advised by the council not to budge until the bailiffs arrive.

Going through the proper eviction process can take months and cost the landlord thousands of pounds – more if the tenant has stopped paying the rent.

Yet local councils do nothing to help. In fact, they do just the opposite. And their stance doesn’t just cost landlords money but other tenants too.

Council policy

Landlords might want to evict a tenant for any of a number of reasons. Perhaps the tenant has fallen behind on the rent, broken the terms of the tenancy agreement or damaged the property. In some cases the landlord might need the property back to live in themselves.

Tenants with nowhere to go might approach the local authority to house them, but local Government housing officers repeatedly come out with some controversial advice: they tell tenants not to leave their current accommodation until the bailiffs arrive.

This means ignoring either a section eight or section 21 notice to move out (either notice will give a tenant at least two months to leave) and then, subsequently, a possession order from a court. Once the possession order has passed, landlords can get a warrant for possession and send the bailiffs round to evict the tenant.

In general councils view any tenant who’s left their previous accommodation before the bailiffs arrive as “intentionally homeless” and so refuse to re-house them.

Dubbed “gatekeeping”, this policy effectively keeps official homeless numbers down, despite the fact that the policy causes havoc in the private rented sector.

Conflicting laws

Council housing officers are in effect encouraging tenants to break the law. A possession order is an order of court issued by a judge and tenants could be held in contempt of court for ignoring it. However I’ve yet to see a tenant prosecuted for this.

Landlords, on the other hand, can end up in court or be fined for any number of misdemeanours such as not having a gas safety certificate or protecting a tenant’s deposit.

Landlords can also end up in hot water if they 'harass' a tenant, even if the tenant has long stopped paying the rent.

It doesn’t seem fair, does it?

Effect on landlords

One of the most common reasons landlords evict tenants is for rent arrears. If a tenant stops paying rent landlords have to go through a time-consuming and expensive process to evict them. In many case tenants can remain in a property for six months or more without paying a penny.

While anti-landlord campaigners might think a cashflow problem is little more than landlords deserve, it pays to look at the bigger picture.

All the time a property is occupied by non-paying tenants, it’s not available to paying, law-abiding tenants. The problems of supply and demand in the private rented sector are well documented – there aren’t enough properties available to rent, so landlords can achieve high rents for properties they do have to let. Anything that decreases supply further simply adds to the supply and demand problem and pushes rents higher still.

Meanwhile, when the landlord eventually gets possession of their property they’ll be looking to re-let it as soon as possible so it can start generating income again. This means they won’t have a lot of time or cash to refurbish it or fix anything that’s broken which means the standard of accommodation falls.

Finally, in a bid to recoup their losses, the landlord is likely to up the rent for the next tenant.

Effect on tenants

Council advice can put tenants in a catch-22 situation. If they want or need council help to be re-housed they have to do as the housing officer suggests, but this means ignoring a possession order from a court. If the landlord decides to pursue them for unpaid rent or the costs of eviction the tenant could end up with a county court judgement (CCJ) in their name.

A CCJ has numerous effects on an individual. It will make it difficult to borrow money, rent another property, buy a property and, in some cases, get a job.

Meanwhile living in a property you’re being evicted from isn’t fun. Tenants may feel guilty about the way their landlord’s being treated, especially if the landlord-tenant relationship has been good up to that point.

Have you been a victim of council housing advice? Let us know.

More on renting your home:

How to evict bad tenants

Rising number of tenants falling severely behind with the rent

No-win no-fee firms set sights on landlords

Government plans to turn landlords into immigration officers are crazy

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Comments



  • 06 September 2013

    HA! Land Value taxation. Thats a different topic. Having had a quick scan of their website introduction I didn't find BTL at all. http://www.landvaluetax.org/the-campaign/introduction-to-land-value-tax-campaign.html And LVT seeks to make LVT (which is claimed not to be a tax) a replacement for lots of other taxes. Which at least is arguable as a proposition. But in relation to BTL, would LVT be payable by the landlord or the tenant? In either event the tenant would pay because the landlord would pass it on. Personally I can't see LVT catching on because it would penalise the low paid living in social housing in the urban conurbations, and would be a regressive form of revenue raising - because after all LVT wouldn't be a tax - would it? But the community charge was soon labelled the poll tax and many other revenues like National Insurance and Vehicle taxation are quite properly regarded as taxation. If it talks like a duck, swims like a duck, quacks like a duck then it's a Duck. But property in the UK isn't monopolistic no matter what you write. We'll just have to agree to disagree - we don't have the means here to put your views to a vote, and I doubt that you'd accept a vote as being in any way authoritative - I know I wouldn't. I've often been outvoted on matters and later have been found to be correct. I'll not post any more on this topic

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  • 03 September 2013

    anniesdad, [I]"Have you been to London recently? I can see loads of new residential developments taking place. Link#1 Link#2" [/I] Link# 1 is an article from the Independent which talks about rising building activity [B]in general[/B] with no specific mention of London. Link#2 is about re-development and not [B]new growth[/B] as such, although I will give you that it is new housing with the caveat that it comes from the subdivision of existing rentable property rather than actual new build. [I]"So the market is expanding (supply) but maybe demand is expanding faster. It doesn't make a monopoly though, it's just a free market operating."[/I] I never said it was a monopoly, I said it was a [B]monopolistic[/B] market. If you take a look at my previous posts you will see that in one of them I provide a definition of such a market. meldrewreborn, [I]"But your attempt to portray the property market as monopolistic is an abject failure as is your grasp of the factors involved."[/I] Care to explain? [I]"But the Landlord has also had to buy that property at some stage and so has paid for the benefit of that local environment."[/I] This is wrong on so many levels. They might well have paid someone else for those benefits* but then that becomes part of the 'value' of the land/house. No wealth is created except though the continuing maintenance of the property (which, although monopolistic you can charge for) and the continuing maintenance of the area, which is almost exclusively paid for by others. I hope it's clear by now what I'm trying to get at - the "evil" comes from the parasitic nature of BTL. Take for example what would happen if you owned a BTL and one day everyone else in the area moved business, demolished their homes, stopped paying for council services etc? Do you think yould you still be able to charge the same rent? BTL'ers are parasites, they take wealth created by others (the community) and rent it out. (*) These benefits, which are community created lead to an increase in land value (house price) and which, as you correctly point out you pay for. It's another example of social-economic parasitism and is one of the issues that Land Value Taxation seeks to address.

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  • 02 September 2013

    Landofconfusion. I fully agree that monopolies are bad for consumers and we need protection from them. But your attempt to portray the property market as monopolistic is an abject failure as is your grasp of the factors involved. Futhermore a landlord letting property in Mayfair is getting benefit from the local environment as you say, and that factors into the acheivable rent - as you say. But the Landlord has also had to buy that property at some stage and so has paid for the benefit of that local environment. Many buyers of property will want to buy in an "up and coming" area, so as to benefit from accelerated capital growth. Homeowners will pocket that capital growth tax free, but the landlord will be liable to capital gains tax on the gain thus benefitting the community at large. BTL is not the evil that you portray it to be, but for the most part people trying to do good for themselves and their tenants and as any landlord will tell you - a happy tenant is a good tenant - and worth keeping happy by doing repairs promptly and keeping the property in top notch condition. There are some landlords who break all the sensible rules and deserve punishment. But you should save your wrath for the genuinely bad and not the good majority..

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