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Posted on February 16th 2016 by admin-movingin

Sub-letting scams up as landlord possessions reach record high

Original Author: Graham Norwood

The total number of evictions last year reached a record high of 42,728 according to data from the Ministry of Justice. 

Whilst overall possession claims fell during the year to 148,043, the number of accelerated possession cases continued their upward trend reaching 37,663 in 2015, up 4.5 per cent on the previous year and up 10.5 per cent on 2013.

Now Paul Shamplina, founder of specialist eviction service Landlord Action, says the rise in evictions and use of Section 21 accelerated possession procedures is a stark insight into the severity of the UK’s housing shortage. 

“Rising rents and welfare cuts are undoubtedly to blame for the growing number of evictions. With a shortage of affordable properties, particularly in the capital, the imbalance of supply and demand has pushed rental inflation well beyond the levels at which tenants’ wages have risen” he says. 

“We’re seeing more subletting scams and cases of tenants renting out properties on holiday websites in order to cover their rent than ever before.”

According to the MoJ, the proportion of claims made using accelerated procedure has increased from seven per cent in 1999 to 25 per cent in 2015. 

“Rising house prices, uncertainty over future buy to let tax implications and concerns over increased legislation such as Right To Rent and the Deregulation Act have been the catalysts for many self-managing landlords to consider selling up.  They use Section 21 as a way to gain possession of their property as quickly as possible” suggests Shamplina.

In other circumstances, where tenants are in arrears, Landlord Action says many landlords still opt to use a Section 21, instead of Section 8.  

Some landlords feel they won’t be able to collect rent arrears so this allows them automatic right of possession without having to give any grounds once the fixed term has expired. The organisation says other landlords are being forced down the Section 21 route because local councils are advising tenants to remain in properties until a possession order has been granted by the courts: this means they can apply for re-housing and do not make themselves voluntarily homeless.

“A section 21 usually enables landlords to gain possession much quicker on a no-fault basis, so they can re-let the property, which is often more financially viable than chasing arrears. I believe use of the Section 21 process for landlords will continue to grow year on year because of councils’ pushing the problem back onto private rental sector landlords” says Shamplina.