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Many BTL landlords face financial ruin if eviction ban is extended

A number of buy-to-let landlords face financial hardship because of the coronavirus crisis, especially if the existing ban of tenant evictions is extended, according to Landlord Action.

Some landlords who already had possession cases for rent arrears going through the courts prior to the ban could find themselves trying to cover more than a year’s worth of rent if the courts are unable to resume existing cases from 25 June, and that is why Paul Shamplina, the founder of Landlord Action, says that these cases must be prioritised.

According to Landlord Action, following the government’s ban on evictions in March, there are an estimated 25,000 cases stuck in the legal system, of which 10,000 are from private landlords.  

With more than 500 live possession claims with the courts, Shamplina says he is being contacted daily by landlords who launched eviction proceedings against tenants for non-payment of rent before the ban and are now facing financial collapse.

Shamplina has also called on the government to reject Labour’s five-point plan, which includes calls for an extension to the temporary ban on evictions from three months to six months. 

He said: “We understand and agree that it will take many months for people to recover from this crisis and adequate support to prevent homelessness is absolutely essential. However, I do believe that existing possession claims should be treated separately to any tenancy issues that arise as a result of Covid-19. 

“Cases where rent arrears had already built up for months and landlords had sought action prior to the pandemic should be prioritised as these landlords will be taking the biggest financial hit.

“If the ban on evictions is extended for existing cases as well, there will be thousands of landlords who, by the time they are finally able to gain possession of their properties, will have up to years’ worth of rent arrears, maybe more. I dread to think how the court systems will cope towards the end of the year.”

  •  G romit

    Don't confuse the Government with someone gives a f**k about Landlords.

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    You're 100% correct there. It feels like landlords are treated like a charity and a subsidy to the lack of rental properties. There's plenty of support for tenants (good AND bad) and Sweet F A for good landlords We're not really recognised as a business and are taxed differently and more than other businesses...if they are trying to make us throw the towel in they are doing a great job. I'm downsizing big style after the lockdown...it's too much hassle....time for a change of direction...maybe commercial property...at least it's treated like a proper business....at the moment!

     
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    well said, greedy landlords that have used the tax free money that they took out of the mortgaged property due to valuations being inflated will now be jumping off the roof tops.

     
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    PossessionFriendUK PossessionFriend

    He and the NRLA 'boast' that they "talk" to govt on a 'daily basis'
    Well, perhaps they shoould either stop, or say something different and more blunt and direct to MHCLG - as there's nothing but harm to landlords coming from them.

     
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    I am a fan of Landlord Action and the Channel 5 programme where at least some tenants stealing free accommodation eventually get their comeuppance. We need more Pauls to help more Landlords.

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    The greedy parasitic type of landlords (there seem to be more of them than good landlords) the ones that have borrowed other peoples money to make profit from low wage earners will be going bust "HOORAY" teach em a lesson. at the moment if you want to get a btl mortgage they are demanding that the deposit should be at least 40% of the purchase price. that means that the banks are expecting a collosal bust in the property market, the banks never loose, this means to say that private tenants should vet the landlord to see how secure they are before signing any agreement. The bank of England has been the new council for many years, now it is time for pay back, the bank will take over the greedy landlords "portfloios" then put them to good use. meanwhile an attachment to earning put against the landlords for any of the banks losses.

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    Chip on shoulder Ray, many landlords own their properties without borrowings, I like many others got into it in the 80s and 90s because we didn't like private pensions it's worked really well for me and many other babyboomers, a few of the ' flash with no cash' landlords may go bust, but the rest of us with real money in our pockets will be in the auction rooms buying their properties.

     
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    I smell jealousy from you Ray? I think you need to learn a bit about real life (as well as how to spell properly). Many of us have built our portfolio on hard graft and sacrifice. However people like you will never accept that risk and effort should reap reward - but I don't care what you think or wish for as I shall never be poor again and my conscience is clear.

     
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    Well Ray you'd be wrong, the vast majority of landlords are decent people owning just 1 or 2 properties a lot of them because their retirement pensions were ruined by socialist Gordon Brown. As for tenants at least 70% of them treat their properties poorly, the standard of cleaning in most is pretty shameful (I have my own inventory company so see the carnage first hand) They never stop whinging about utter trivia and how hard done by they are, when they are living in flats far better than they could afford to buy on their average earnings. A property crash is just wishful thinking, if anything prices are going up, the big builders have warned that they have lost nearly 40 per cent of their production for this year, so shortening supply even more and with the current level of immigration, coupled with the billions of dollars waiting to be invested by the Chinese your sad little crash ain't going to happen.

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    That's a big chip Ray, so you don't supply any property to house the millions of Private Tenants but we do, we also pay huge amount of tax on the Rental income and for me its £4 in in every £10 which is a very substantial amount, plus all the anti-landlord regulations. I am the one who takes all the knocks from the people on the side lines with no-input and I also pay thousands to Local Authorities licensing extortion schemes or course they have no in put whatsoever either good that isn't it ?, we for pay all. Incidentally my Tenants are currently £16k in arrears so do I need people like you shouting the odds with no in-put. Sebastian, Mr Paul Shamplina is a straight forward honest guy working with-in the law, very fair to everyone, a very professional competent individual that don't wrong anyone and I have seen him on the circuit at numerous housing related events for 20 years, just maybe Ray is one of those who thinks no one should pay for anything. Have a nice life.

  • Paul Barrett

    Ahh! Presumably idiots like Ray DON'T agree that property developers should be able to borrow on the increased value of their properties to build more commercial property.

    Other businesses borrowing on the increased value of property they own.
    Seems like ray doesn't like the idea of people borrowing based on increased values.
    Forgive me but isn't that a principal driver of the housing market in the UK!!!!??
    I suggest ray is a silly little socialist and consequently his views are irrelevant.
    It is capitalism that pays for socialism.
    Socialism normally stops when they run out of other people's money!

    It seems ray resents the deployment of capital in the housing market especially the rented sector.
    How quaint!!

    Meanwhile back at the coalface LL are getting on with the day job keeping their business going in spite of millions of feckless tenants who won't or can't pay their rent.
    It seems to have escaped the attention of feckless tenants that perhaps they should have savings to cover sudden income loss.
    Just a little anecdote from yesterday while I was outside attempting to fix my van.
    Two tenants a couple of houses away from me discussing things.
    One eventually stated that if it came to a choice of being able to only afford food or rent the LL would not be getting any rent.

    That just shows you how feckless tenants are.

    But I can guarantee that if there was a fast track eviction process for rent defaulting to get rid of rent defaulting tenants his attitude would have been completely different.

    Feckless tenants know they are protected by a dysfunctional eviction process which gives them licence for their feckless behaviour.
    It would have been great if he had stated that he had to prioritise paying his rent before food otherwise his LL might boot him out and that he would have to try using a food Bank etc to survive.

    That little scene I witnessed yesterday encapsulates all I think about tenants.
    They are largely feckless scum who will knock LL at first opportunity.

    Such attitudes are another reason for me to get out of the PRS.
    I refuse to let my rather nice properties to such sanctimonious scum.
    The most important thing for tenants to realise is that the MOST important Bill to be paid is their rent bill.
    Without a roof over your head life can be pretty uncomfortable.
    But the eviction process facilitates these feckless attitudes.
    As part of my future referencing I will be wanting to see a decent level of savings.
    No savings no tenancy.
    I refuse to be used as a free bank loan for feckless tenants to live their feckless lifestyle.
    I say to tenants start saving so you can always afford your RENT even if you suffer sudden income loss.
    Adopt a boring lifestyle until you have a sufficient cash buffer of at least 6 months of savings to cover normal monthly outgoings.

    Trouble is few tenants are interested in saving anything.
    They live a just in time lifestyle knowing there is little a LL can do to get rid of them quickly.
    This then inculcates feckless tenant lifestyles.

    .The law enshrines this fecklessness by protecting tenants from immediate eviction if they stop paying rent.

    So LL now you know where you are in the pecking order as far as feckless tenants are concerned.
    Ensure your business models are sufficiently robust to deal cope with the attitude of the average feckless tenant.
    If you don't you could be bankrupted by your feckless tenants!!
    Some food for thought.


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    Tut tut Ray. Get some grammar lessons and do some actual research before you start mouthing off on here about a subject you obviously don't have a clue about.
    I have a dozen properties... all achieved by the sweat of my brow.... Jealous? Yes I think you are... but then again... you could have done the same thing if you had the guts and the inclination.
    Don't knock others who are prepared to work hard for a better life and we won't knock the likes of you.. who aren't.
    I'll be starting to sell my properties off one by one as a result of the way landlords are treated and will be making a tidy profit even after I pay my taxes... It's a shame for the tenants who will have to find somewhere else to live but what can one do? I'm looking forward to pondering over what to do with all that lovely profit that my hard work has made for me . Decisions decisions.... 👍🏻

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    Justice delayed is justice denied. The law to evict bad tenants is bad enough. Do we really need it to be worse? Utterly unfair. As a result I imagine that future landlords will simply up rents and make life more difficult for all future tenants and be much more careful and thorough with screening. ASTs are not fit for purpose. Is that what renters want?

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    Well said Shane...
    Same here. My 10 houses and all the hard work will provide a very comfortable retirement.
    I can hardly wait to sit down and play with those lovely bank statements getting bigger as each month passes....

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    Rental market is finished. If rent collection and eviction are enforced there will be millions of homeless and millions of empty properties. That won’t happen, if it did the properties would be squatted or burnt to the ground.

    Big correction here, virus burst a bubble that should have popped years ago.

  • Paul Barrett

    If repossession is successful there will be other rent paying tenants.

    Just because some can't or won't afford the rent DOESN'T mean others won't.

    There may be 4 million unemployed soon.
    It will take about 2 years for LL to repossess.
    In the meantime tenants will apply for HB.
    That will reduce the rent debt somewhat.

    LL will at least receive HB which is better than nothing.

    Who knows by the time eviction is to occur the tenant might have recovered things to the point that the LL DOESN'T bother repossessing.

    LL might not receive market rents but most will receive HB.

    LL will still be able to let their properties.
    Maybe not for the rent they have been achieving.

    But anything is better than nothing!!

    There will be no bubbles popping.
    Rental property is still in much demand.
    If many properties are repossessed by lenders they will simply let out.
    This is what lenders did in the 90's.

    So no empty or squatted or burnt out properties.
    Squatting in residential properties is now a criminal offence for which you can be arrested.

    There will be difficult times for all but nothing like you have quoted.
    In fact things won't be anything like you have mentioned.

    By the way the only way to reduce the bubble is to find and deport the 2 million illegal immigrants.
    Start building millions of houses.
    Stop all immigration apart from students and those with skills that are needed.
    That way demand will be reduced and supply increased.
    Then eventually an equilibrium will be reached.

    That will take about 10 years

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