The appeal of the buy-to-let market can only be waning further. A fresh national lockdown is set to exacerbate pressure on personal finances and the ability of tenants to meet rent payments. The government’s decision to ban the enforcement of evictions until mid-January is understandable, but as arrears build, an increase in disputes between landlords and tenants next year is likely.
While most landlords have reached an agreement with tenants in hardship over rent payments, others pushed the button on eviction proceedings when the ban was lifted at the end of September. Yet there is a growing recognition among landlords that rather than pursuing tenants through the courts, they will likely have to stomach losses. “If these tenants are genuinely struggling to pay, then you can get judgement for arrears, but it’s not going to be worth the paper it’s written on,” says Samuel Lane, solicitor in Irwin Mitchell's real estate disputes team.
Landlords giving tenants the now required six months notice - which remains in place until at least 31 March - are increasingly making commercial agreements with tenants rather than pursuing it through the courts, he says. That includes foregoing arrears, giving tenants their deposit back in full or one month rent-free, in exchange for vacating the property sooner. If an agreement is reached, it is usually within a month of notice being served.