With a static or even shrinking economy the number of people living in their own property is on the decline.  Figures suggest that one in every six households currently live in private rented property, many of which are owned by individual landlords on a buy to let mortgage.

Things may be about to get a little tougher for private residential landlords amid changes to the welfare benefits rules due to be implemented later this year.  The current rules permit Landlords to request housing benefit to be paid to them directly if their tenant falls into arrears.  Plans to change this to give tenants greater responsibility for managing and budgeting their income have led to warnings of a sharp increase in rent arrears.

Figures announced by The National Housing Federation claim that rent arrears will increase by £245m or 51% as a result of these welfare benefit changes.

If you are a residential landlord what can you do to protect yourself against becoming a victim of these statistics?

If you can rent out to tenants in employment make sure you take references and run a credit check.  Using a good letting agency makes this a lot easier.

If the tenant is not in employment or is but will be claiming housing benefit to pay some of your rent ask them about their renting history and ask for references from previous landlords.  If they are reluctant to provide you with this information this should ring alarm bells.

It is important that you enter into a properly drafted Assured Shorthold Tenancy and if you take a bond make sure it is registered in a government authorised deposit protection scheme.  Defective agreements can prevent or delay eviction proceedings.

Legal rules mean that it can be difficult to evict your tenant during a fixed term of a tenancy.  It is wise therefore to consider this when you are deciding how long a tenancy to give to a tenant.  A new tenant may only want to commit themselves to six months and this is a good way of testing whether the tenant is going to be reliable during that time.  Tenancies can be renewed for further fixed periods or held over on a month to month basis.

Remember that it is a criminal offence to do anything which compels or forces your tenant to leave.  You must obtain a Court Eviction Order which has to be enforced by a Court bailiff.  It can be expensive and a lengthy process to evict a tenant so wherever possible be as careful about who you rent your property to.

For more information about this topic please contact Susan Lewis on 01924 387110 or email susan.lewis@jordanssolicitors.co.uk .


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