There has been a 12% rise in the number of claims for possession by landlords in the UK since last year, with very significant increases in particular areas of England and Wales.
The government’s latest Court statistics show that in one-fifth of UK courts there has been a 20% increase in the number of possession claims brought by landlords compared to the previous year. In total, there were 42,520 claims for possession under the accelerated claims procedure issued in the first quarter of this year.
The increase can be explained partially by the fact that the private rented sector continues to grow. Newly released figures from the Office of National Statistics show that there were 1.2 million households renting from private landlords in 2011, twice the number recorded in 2001. Over the same period, the number of families who own their own home dropped 13%.
However, some areas of England and Wales have seen sharp increases in the number of claims for possession that cannot be explained by the increasing numbers of families in private rental accommodation alone. In central London, claims rose by 36%, while Greater London has over four times as many possessions claims per household as the South West, the area with the lowest.
Romford saw a massive increase of 52%. Milton Keynes is up 42%, Canturbury is up 28.5% and Guildford is up 36%.
There was a large increase in claims in Wales, most notably in Neath and Port Talbot, which saw a rise of 98%. Other high claims areas included Pontypridd (up 25.1%), Newport (up 23%) and Blackwood (up 20.3%).
Michael Portman, managing director of LetRisks, an insurance and referencing services provider to the let property market, believes increasing rents are responsible. He said, “Tenants are facing continuing pressure on their finances as rents have increased in every region across the UK. Rents are rising nearly five times faster than wages, which is crippling millions of households.
“The rise in April means average rents have returned to levels not seen since November last year and they are 3.9% higher typically than a year ago. Wales recorded the second highest spike, with a 5% rise taking rents to £566 typically. Londoners are the worst hit, with the average rent jumping by 7.6% to a record £1,110 a month.”
He added, “We would urge letting agents to continue to monitor arrears, take legal action at the earliest stage and above all ensure that landlords have adequate rent and legal insurance to protect the risk.”
However, recent data suggests that rents are actually falling outside of London, by as much as 4% when inflation is taken into account. Likewise, it had been observed that rental arrears had also decreased slightly.
Whatever the underlying reason for the increase in possession claims, LetRisks points out that 70% of notices were thrown out of court because they were wrong. An increasing number of landlords are relying on the accelerated procedure to regain possession. But if the notices are not served correctly, it could lead to costly delays and additional expenses.
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