May 17, 2024 7:46 am

Insert Lead Generation
Nikka Sulton

New data from the Ministry of Justice highlights the significant impact of rising interest rates on landlords. The figures for Q1 2024 show a noticeable increase in landlord possession actions compared to the same quarter in 2023. Landlord possession claims have risen from 23,389 to 24,874, marking a 6% increase. Similarly, orders have gone up from 17,644 to 18,154, reflecting a 3% rise.

The trend continues with warrants, which have increased from 10,503 to 11,407, a 9% jump. Repossessions have also seen an uptick, rising from 6,501 to 6,864, an increase of 6%. These statistics underscore the growing challenges landlords face amid higher interest rates, which are making it more difficult for them to manage their properties and financial obligations.

Owner-occupier mortgage possession claims saw a significant increase, rising from 4,035 to 5,182, which marks a 28% rise. Additionally, the number of orders issued grew from 2,532 to 3,019, reflecting a 19% increase. Warrants also showed an upward trend, going from 2,636 to 2,881, representing a 9% rise. Repossessions executed by county court bailiffs experienced a modest increase from 729 to 759, a 4% rise, indicating growing financial pressure on homeowners.

The trend of rising possession claims has been observed across all regions, highlighting a widespread issue. This increase can be attributed to various factors, including economic instability and rising interest rates, which have made it more difficult for many homeowners to meet their mortgage obligations. The impact is not isolated to any single region, demonstrating that the financial strain is being felt nationwide.

Private landlord claims are notably concentrated in London, with five out of the ten highest claim rates recorded in the capital. This concentration underscores the unique challenges faced by landlords in London, where the cost of living and property values are among the highest in the country. The data suggest that landlords in London are particularly vulnerable to financial difficulties, leading to a higher number of possession claims in the area.

Private landlord claims are mainly concentrated in London, with five of the top ten claim rates occurring in the capital. This trend highlights the unique challenges faced by landlords in the city, where high property values and a competitive rental market make the impact of financial stress more pronounced. As a result, landlords in London are more likely to initiate possession claims compared to those in other regions.

The median average time from claim to landlord repossession has risen to 24.1 weeks, up from 22.4 weeks during the same period in 2023. This increase indicates a longer process for landlords to regain possession of their properties, which can exacerbate the financial strain on those who rely on rental income. Extended repossession times can lead to prolonged periods without rent, adding to the challenges faced by landlords already dealing with rising interest rates and other economic pressures.

Conversely, the median average time from claim to owner-occupier mortgage repossession has decreased to 45.7 weeks, down from 60.9 weeks in the same period in 2023. This reduction suggests a faster process for mortgage repossessions compared to the previous year, possibly due to more streamlined procedures or increased efficiency within the court system. For owner-occupiers, this means that while the threat of repossession remains significant, the time frame for resolution has shortened, potentially allowing for quicker recovery or relocation.

The figures have produced predictable responses from various groups.

Law Society president Nick Emmerson expressed concerns about the rising number of people at risk of homelessness. He stated, “With the cost-of-living crisis and high interest rates, many are struggling with rent and mortgage payments and are at risk of losing their homes. More often than not, legal aid is their only hope but it remains out of reach.” Emmerson highlighted that many people lack access to local legal aid providers, which severely limits the impact of the government’s efforts to increase housing advice under the Housing Loss Prevention Advice Service.

Emmerson pointed out that 25.3 million people, or 42% of the population, do not have a local legal aid provider for housing advice. This significant gap means that despite government initiatives, many individuals are left without essential support. He also noted that the number of law firms offering housing advice has decreased because legal aid rates have dropped by almost 50% since 1996. This decline in available legal aid is contributing to the growing issue of housing insecurity and homelessness.

“The pressure points are clear, and the government must address them urgently to stop the increase in the number of people being made homeless.”

Polly Neate, chief executive of the charity Shelter, comments, “Evictions are reaching new heights while this government prioritises the interests of a small group of self-interested landlord backbenchers over the safety and security of 11 million private renters.”

Neate also criticises the government’s failure to deliver on promises made five years ago to reform private renting. “We have a Renters Reform Bill that is now in tatters, leaving renters trapped in the same difficult conditions they’ve endured for decades or at the mercy of their landlords, facing the frightening prospect of homelessness,” she says.

“With the Bill now in the hands of the Lords, peers of all stripes must overhaul this threadbare legislation and deliver the change that renters desperately need. Without serious amends to give tenants greater protection from eviction after moving in and longer notice periods, renters’ best hope of a stable home will be lost.” 


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