Author: interestratesinfo

Court fees for getting rid of problems tenants are rising an inflation-busting 10pc in another blow for landlords.

Fees for recovering land will increase by £36 to £391 from today, whereas sealing a writ of control or possession in the High Court will now cost £78.

Issuing a warrant of possession, which allows bailiffs to evict occupiers from a property, will now cost £143, up £13. The fee for an urgent High Court Possession Order is set to rise to £626, whereas a general application fee will increase to £119. 

Court fees are typically reviewed by the Government every two years but this is the first time that costs have risen since September 2021.

It comes as the Government forges ahead with plans to ban so-called no-fault evictions, which allow landlords to bypass much of the bureaucracy of the legal system, despite backlogs in the courts.

HMOs are becoming more popular among landlords as many turn to them as a ‘surer bet’ than other types of rental property in a time of economic uncertainty, it has been claimed.

As LandlordZONE has reported recently, HMOs offer much higher margins than properties for families or couples even though the higher regulatory and admin requirements – such as rent collection, licencing and fire detection and prevention equipment – make them harder and more expensive to operate.

Lender Shawbrook bank says HMOs made up 27% of all its business in both 2022 and 2023 but this has already risen to 34% in 2024.

The lender reports that while some landlords are diversifying their portfolios, there has also been a rise in HMO business from non-portfolio landlords.

A surge in buy to let landlords exiting the private rented sector (PRS) is being fuelled by an increase in receiver appointments, one leading auctioneer says.

Landwood Group says it has seen a 150% increase in receiver appointments for BTL portfolios in the past six months.

And there’s an increase in BTL landlords heading to the auctions in a bid to avoid insolvency as tax burdens and regulatory pressures increase.

That’s despite rising rents and tenant demand.

It’s a mixed bag for landlords at the moment, with previous uncertainties around EPC regulations and the stress of mortgage repayments. For accidental landlords, or older landlords who’ve been hit badly by the rise in interest rates, there’s a rush to cut their losses and sell. But landlords need to be careful.

A recent report by the comparison site Uswitch revealed that around a third of landlords claim they intend to sell a property within the next 12 months, and there’s good reason: in the final three months of 2023 there were 500 buy-to-let mortgage repossessions, up an astonishing56.3 per cent on the same three months of the previous year.

When buy-to-let investors purchase a property, they are looking for two things: a good income from rent, and the potential for house price growth.

Many have a bias for one over the other. Prioritising high rental yields usually allows for good cash flow, but can come at the expense of a rising house price over time.

Other landlords focus on the fact that, if they choose the right location, rising house prices will make up the bulk of their returns. 

However, picking an up and coming area where values will climb can be easier said than done.

The average buy-to-let investor who bought in London eight years ago won’t have seen any capital growth at all, for example, according to Land Registry data – while someone who bought in Manchester will on average have seen their investment rise by 65 per cent.

The UK is likely to continue missing its housing targets as the planning system and uncertainty hinder development, a credit rating agency has said.

In a report, Morningstar DBRS said it was “hopeful” about a recovery in the housing market due to the stabilisation of rates and building costs. However, it said builders faced a “myriad of ongoing challenges” that made meeting housing targets in the near term an “uphill battle”. 

Both the Conservative and Labour parties have set housing targets of 300,000 homes built per year, but builders have constantly failed to meet this. 

Morningstar DBRS said builders were contending with “upcoming regulatory changes, considerable red tape, a shortage of small builders, a tight labour market, and incentives required to attract new homebuyers”. The firm said all these factors affected builders’ profitability and, consequently, the number of homes built.