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Long-term renting continues as repossession claims fall

Posted on 2016-12-29

Repossessions and evictions are an unfortunate part of the rental process that the majority of agents and landlords are keen to avoid. However, in some cases, there is little other option and the legal route becomes a necessity by default.

Despite some unfavourable representations in the media, evictions in the Private Rented Sector (PRS) are relatively uncommon and are only used by landlords as a last resort.

The Ministry of Justice frequently publishes reports on the number of evictions and repossessions across the country, and we've taken a look at the latest figures which show some positive trends...

Key stats

- All stages of landlord possession actions in July to September 2016 have decreased when compared to the same quarter in 2015

- In July to September 2016 there were 5,129 possession claims made by private landlords, representing 15% of all landlord possession claims

- During the same period, there were 8,532 accelerated claims (which can be used by both private and social landlords)

- The number of possession claims made by private landlords in Q3 was 21% lower than the 6,486 recorded in the first quarter of 2014

- Landlord possession claims, orders for possession, warrants of possession and repossessions by county court were all down by between 8% and 14% in Q3 2016 when compared to the same period last year

- 23% of all landlord possession claims lead to a repossession by country court bailiffs (this figure has remained stable between 19% and 23% since 2001)

When looking at these figures in comparison to 2015, they certainly show a positive shift to fewer possession claims and actions. They also remind us that possession claims made by private landlords continue to account for a small proportion of the overall figure.

Before getting too carried away, though, we must remember that these figures only represent one quarter of 2016. Annual figures for 2015, which were published earlier in 2016, actually showed that the total number of repossessions reached a record high.

What's more, when compared to the final quarter of 2015, the number of repossession claims made by private landlords last quarter increased from 4,898 to 5,129.

The overall movement, however, is that repossessions claims have been falling since 2014. It certainly will be interesting to see the annual figures for 2016 - which will be published in 2017 - to give a clearer idea of a long-term trend.

What are the implications for letting agents and landlords?

Fewer landlords are going through complicated court procedures - quite simply, if there are fewer repossessions then fewer landlords are going through the costly and time consuming evictions process. This is positive news for everyone involved, particularly considering that it was announced earlier this year that a high number of courts will be closing.

Tenants are staying in rental properties for longer - if landlords aren't evicting tenants and reclaiming possession of their properties as frequently, tenants will be occupying these homes for longer periods. This is good for landlords and agents as it means costly void periods will be minimised. It also points to the trend of long-term renting - something backed up by the latest English Housing Survey which found that the average private tenancy is now four years.

The quality of tenant is improving - the trend of falling repossession claims could also mean that the quality of tenant renting privately has improved. If landlords and agents don't have to deal with problem tenants, they have little reason to evict them and reclaim possession of a rental property. That said, choosing the right renters remains crucial and so pre-tenancy processes like tenant referencing remain all-important.

Landlords and agents must strive to provide quality housing for tenants - if tenants are staying in the rental sector for longer, it's vital that the quality of private rented housing continues to improve. As more tenants opt to rent long-term, they are becoming more discerning in their taste. Landlords who don't keep up could lose out in the long-run.

Evictions and repossessions remain a last resort - these improving figures show that claims for repossession and evictions remain a rare occurrence and something that the majority of landlords resort to only after they have explored all other possible avenues. If the number of PRS claims for possession continue to decrease, this will benefit landlords, tenants and letting agents alike.

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